IBM has acquired a 7% stake in the trade finance platform We.Trade which is jointly owned by 12 European banks which include, HSBC Erste Group, UBS, CaixaBank, KBC, Nordea, Rabobank, Santander, Société Générale, Deutsche Bank, and UniCredit.
IBM has been the technology partner of the consortium since the beginning. This move would help IBM to consolidate its position in the enterprise blockchain field, and at the same time, the association would help We.Trade to have a global footprint.
We.Trade is considered as the first enterprise blockchain financing platform to go live back in 2018. Originally, it was created to help the medium and small level enterprises to get access to trade finance.
We.trade’s CEO – Ciaran McGowan – commented on their association with IBM and believe the partnership would help them make their platform more scalable and accessible to a larger audience globally. Their current focus would be on the African, Asian, and Latin American markets. He explained further saying:
“It’s all about getting the right balance. Back then [in 2019], we had seven staff at the company, and it wasn’t realistic for seven staff to make all the decisions, to collate all the different requirements, to prioritize and manage everything.”
The Dilemma Over Intellectual Property (IP) Ownership
We.Trade believes that its association with IBM would be of great value, however, many have pointed towards the dilemma over Intellectual Property (IP) ownership.
The former CEO of the financial consortium believed that no single entity in the consortium had a bigger say than others, which was one of the key reasons behind the success of the platform.
Even when IBM was a technology partner, there was a clear distinction between its own IP and the platform’s IP. However, now that IBM also has a stake of 7%, apart from their technological backing for the platform given We.Trade is built on IBM’s Hyperledger based blockchain; many believe it could tilt the balance of decision making. IBM also has had issues with the IP ownership in its past partnerships.
When IBM enquired about the obvious question of the imbalance that this ownership might cause, Parm Sangha, the global trade finance leader at IBM, downplayed the question and claimed that their only motive would be to take a multi-cloud approach and also pointed that hyperledger is an open-source technology and thus concerns over its IP ownership is not valid.
We.Trade is now planning to interoperate with another blockchain-focuses trade finance firm eTradeConnect, which is based out of HongKong and backed by 12 Asian banks. The firm is also expecting to onboard several other banks and insurance firms during an investment round scheduled for September.