Southeast Asia’s Largest Bank DBS and Trafigura to Pilot $20 Million Trade on Blockchain Platform
- DBS, ICC, Trafigura, IMD, and Perlin builds a blockchain platform in Singapore
- This will cut down the transit time by at least 50%
Southeast Asia’s largest bank by assets, DBS in collaboration with Swiss commodities trader Trafigura and other associates have plans underway for a blockchain trading platform in Singapore, reported Reuters. The idea here, the bank said is to streamline and reduce the paperwork and trade flows.
The International Chamber of Commerce (ICC) is also a partner in the project.
The pilot trade on the ICC TradeFlow platform will involve $20 million worth of iron ore transported later this month starting out in Africa to China, the bank said.
The platform was developed on Singapore’s IMDA and blockchain technology of Perlin.
The open-source platform permits, sending, receiving, and acting upon trading in real-time. This will significantly reduce document transits, from 45 days to 20 days.
“By tapping into each other’s respective expertise in commodities and finance, our customers will be able to receive their goods at least 50% faster with much less paperwork,” said Tan Su Shan, DBS head of institutional banking.
More features will be added to the ICC TradeFlow platform following the pilot to make the process more seamless, with a vision for global adoption. These include trade finance on-the-go, credit rating on trade participants, background information, which will build trust for all entities.
DBS Venturing Deep in Blockchain
This, however, isn’t DBS’ first foray into the field of blockchain technology. About a year ago, the Singapore bank collaborated with agricultural commodity business Agrocorp to build a blockchain trade platform that will enable 4,500 Australian farmers to connect with customers.
The blockchain platform has been expected to reduce the working capital cycle by 20 days while providing transparency, traceability, and security when dealing with a new counterparty. It was further planned that the platform will be expanded to Canada, Ivory Coast, Myanmar, and Ukraine.
In Sept. this year, DBS Bank also started offering multi-tier financing on a logistics blockchain platform to help SMEs in China get faster access to trade financing. Neil Ge, CEO of DBS China also revealed that the bank completed its first financing transactions on the Rong-E Lian blockchain platform with suppliers in August.