we.trade (stet) has announced an enhanced collaboration with IBM with the latter becoming a shareholder. This collaboration will enable network enhancements and accelerate the global commercialisation of we .trade’s platform. we.trade is a blockchain-based platform that seeks to make international trade faster and more efficient: the previous ownership involved 12 banks.
“No other distributed-ledger based platform for trade has moved so rapidly to deliver value for member organisations and their customers,” said Ciaran McGowan, CEO, we.trade.
“The enthusiasm for this platform underscores the need to continue to invest and expand access to a growing number of organisations.”
An IBM Institute for Business Value survey of more than 1,000 organisations around the world, found respondents stating that accessing new markets is among the top motivating factors to join an existing blockchain network (for example, we.trade). Meanwhile, 64% percent of respondents indicated that reducing friction in current processes and services was a top reason for using blockchain technology to augment existing trade digitisation investments.
In the current COVID-19-shaped business environment, improving access to trade finance is vital for economic recovery. With the disruption in many of the services which support traditional trade finance methods, there is a new incentive for international trade to go digital.
For this to happen successfully, international trade platforms must offer digitised versions of once manual business processes to ensure signatures, contracts and trade financing agreements can all link.
“The strategic direction for we.trade and IBM is focused on driving growth and transparency across the entire trade ecosystem, collaborating to enhance the network effect of blockchain, and expanding access to trade finance and other services to the market place,” said Jason Kelley, GM Blockchain Services, IBM.
“Innovative technology and new pricing structures will help more banks align to internal production controls using their choice of cloud services. Meanwhile we.trade aims to help banks create new trusted trade corridors and expand markets by interconnecting with other regional trade services platforms.”
we.trade connects buyers, sellers, banks, insurers and logistics organisations in a network that aims to simplify cross-border trading. It believes it is one of the largest blockchain-enabled trade networks in production. we.trade is built on the latest version IBM Blockchain Platform.
Over past months, the company says it has seen momentum build as enterprises move to replace paper-based trade finance processes with a digitised solution. To assist this the we.trade design focuses on:
- improving the trade finance lending process
- supporting enterprises as they grow their business and expand into new markets.
we.trade works by:
- automating processes involved in trade finance
- providing traders with access to insurance, credit rating and logistics services.
Once on the blockchain network, traders can:
- initiate orders
- manage the order-to-payment process
- obtain trade financing
- search the network to discover potential new trading partners.
Ownership, expansion and interoperation
we.trade Innovation DAC (we.trade) is a joint-venture company, now owned by 12 banks and IBM. The company started:
- with nine banks as investors in January 2017
- under the project name, Digital Trade Chain.
Renamed ‘we.trade’ in October 2017 it now has the backing of the following European banks:
- Deutsche Bank
- Erste Group
- Banco Santander
- Société Générale
UniCredit AG in Germany, Eurobank in Greece, ČSOB, Komerční Banka and Česká Spořitelna in the Czech Republic are licensees. Starting in July 2020, we.trade will extend its services to additional banks and clients across Europe. After this it says it intends to expand its network globally, starting with Asia. (Clients register to use we.trade via their banks.)
In parallel, it will continue to work to enable the we.trade network to interoperate with other distributed ledger-based trade finance networks. One such example is that already completed with Hong Kong-based eTradeConnect, a blockchain-based trade finance platform formed by 12 Asian banks.
Enterprise Times: what does this mean
we.trade developed its digital trade platform:
- based on the Linux Foundation’s Hyperledger Fabric
- running on the IBM Blockchain Platform.
This combination is what it says delivers reliability, simplicity and security to global trade transactions across:
- trade finance
So far, so good. Except that many of the banks, as well as IBM, have involvement in, or associations with, other trade finance initiatives – for example, Batavia, Tradeshift, Marco Polo, etc. – in addition to separate examples of in-house initiatives like that of Commerzbank. This proliferation makes for confusion for the trade finance customer enterprise: how does it choose which platform to use?