Marco Polo, a distributed ledger technology (DLT) based trade finance solution powered by R3's Corda blockchain, has completed its first transaction, according to reports published March 28, 2019.
Blockchain Technology has Real Use Case
Per sources close to the development, the Marco Polo facilitated transactions between two Germany-based firms: Voith and KSB SE.
Voith is a leading manufacturer of heavy-duty machines including turbines, generators and more, while KSB on the other hand, supplies pumps and valves to its clients across the globe.
With the Marco Polo solution, one of the parties was able to successfully transport special hydraulic couplings from Germany to China, while the other firm tracked the delivery of pumps within Germany.
Reportedly, the entities involved in the transaction were able to eliminate all form of third-parties, minimise costs and paperwork, while also delivering the goods in a more timely way with the blockchain solution.
Specifically, the Marco Polo blockchain solution took care of the order processing and delivery details, and once the goods got delivered at the exact destination, the relevant shipment information was entered into the system and it was “automatically matched with previously agreed data, triggering an irrevocable payment obligation on the part of the buyer's bank,” the team noted.
Once the smart contracts in the Marco Polo blockchain solution signalled a successful delivery of the goods, Commerzbank and Landesbank Baden-Wurttemberg (LBBW), founding members of Marco Polo, handled the payments side of things.
Commenting on the matter, Nikolaus Giesbert, a divisional member for trade finance and cash management at Commerzbank reiterated that the entire process goes a long way to prove that the nascent blockchain technology can provide clients with an efficient and frictionless means of transacting.
In his words:
“The transaction shows that DLT offers our customers a payment undertaking and state-of-the-art financing for trade transactions with both foreign nations and domestically.”
Also, Dr Christian Ricken, a member of the board of managing directors and head of capital market business and asset management/international business at LBBW, noted that the immutability and transparency features of blockchain technology could be highly beneficial to the trade finance ecosystem.
“DLT will potentially hasten up transactions, while also making it faster and more secure. Not only are we breaking new grounds in terms of innovative technology, but also the cooperation between financial institutions and businesses,” said Ricken.
Still in the Pipeline
Following the successful execution of its first real-life transaction, the Marco Polo team has hinted that they plan to execute trades with a direct connection to the client's enterprise resource planning (ERP) systems in the near future.
As reported by Bitcoin Exchange Guide earlier in March 2019, Deutsche Bank collaborated with Commerzbank to conduct a hugely successful blockchain settlement trial.
Since its creation in 2017 by R3 and TradeIX, the Marco Polo blockchain platform has attracted a considerable number of firms including, ING, BNP Paribas, Bangkok Bank, Standard Chartered Bank and a host of others.