1. Goldman Sachs
Goldman Sachs has set up a microsite laying out the benefits of blockchain technology. It has also backed a number of startups in this area, including Circle Internet Financial, Axoni and Digital Asset Holdings.
And earlier this month, Goldman Sachs announced the launch of a Bitcoin trading operation, to be headed up by the firm’s first ever “digital assets” trader Justin Schmidt. This will make it the first major Wall Street bank to open a Bitcoin trading desk, although it will only initially offer a limited number of derivatives.
2. Bank of America Merrill Lynch
Bank of America Merrill Lynch (BAML) and Microsoft are building and testing blockchain-powered financial exchanges on Microsoft Azure. Their aim is to develop applications that optimise trade finance processes, which tend to be highly manual, time consuming and costly.
“Blockchain can transform our business,” says Chris Bozek, who leads the Global Trade and Supply Chain product team at BAML. “Specific to trade, there is significant potential because it is inherently a document heavy business. It relies on bilateral exchanges of documents that need to be reviewed, agreed upon and then complied with to satisfy the financial side of the transaction. It’s an exciting time as we learn how to take advantage of technology to not only accelerate transactions, but reduce risk and cost, and improve transparency for all parties.”
Barclays’ blockchain team was set up in 2014, with a brief to look at different kinds of experimentation with digital ledger technology.
Blockchain will go far beyond finance to affect the lives of “almost everyone,” according to Jeremy Wilson, Vice Chairman of Barclays Corporate Banking. “It will change not just finance, but the lives of almost everyone, directly or indirectly,” he told The Economist’s Finance Disrupted conference last year. “At the risk of overstating this, it looks as if it has the makings of a new operating system for the planet.”
Barclays is one of 22 banks that have worked with R3 to develop an international payments system, allowing existing central bank currencies and any new digital ones to be transacted via the blockchain.
Working with Indra, BBVA recently completed the first global corporate loan transaction using blockchain technology.
“The current process of contracting corporate loans is long and complex with various interactions between the bank and client, with numerous time-intensive iterations and reviews needed. This pilot addressed the complete process from negotiation up to the signing of the loan. This is an example of how BBVA is incorporating the opportunities presented by blockchain technology to arm its key products with greater agility and transparency,” the bank said.
ICICI Bank has enlisted more than 250 corporates to undertake domestic and international trade finance transactions using its blockchain platform.
Chanda Kochhar, MD & CEO, ICICI Bank, says: “We were the first in India and among few globally to pioneer cross-border open account trade finance and remittance transactions on the blockchain. I am delighted to share that we have scaled up the operations to sign over 250 corporates for trade transactions, the maximum for any blockchain solution in the country. I envision that the emerging technology of blockchain holds an immense potential to simplify the document-intensive trade transactions by bringing all stakeholders on a single platform.”
6 and 7. Credit Suisse and ING
HQLAX, together with Credit Suisse and ING, recently completed a Euro 25 million live lending securities transaction, via R3’s Corda blockchain platform.
This saw the two banks transferring Dutch and German government securities on the platform using digital collateral records (DCRs)
HSBC and ING recently worked together to perform the world’s first live, commercial trade finance transaction on blockchain.
The deal, for agri-food trading giant Cargill, was completed using the R3 Corda platform, with a cargo of soybeans exported from Argentina to Malaysia. HSBC notes that conventional exchanges for paper-based documentation related to letters of credit usually take between five to ten days. This exchange was done in 24 hours.
“What this means for businesses is that trade finance transactions have been made simpler, faster, more transparent and more secure,” says Vivek Ramachandran, HSBC’s Head of Growth and Innovation. “The need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous. The quick turnaround could mean unlocking liquidity for businesses.”
JPMorgan Chase & Co has tested a new blockchain platform for issuing financial instruments with the National Bank of Canada and other large organisations, seeking to streamline such processes as origination, settlement, interest rate payments.
Santander has launched One Pay FX, a blockchain-based international money transfer service. Using Ripple’s xCurrent technology, it is available in Spain, UK, Brazil and Poland, and will be rolled out across more countries in the coming months.
Ana Botín, Executive Chairman at Banco Santander, says: “One Pay FX uses blockchain-based technology to provide a fast, simple and secure way to transfer money internationally – offering value, transparency, and the trust and service customers expect from a bank like Santander. Blockchain technology offers tremendous opportunities to improve the services we offer our customers, and the launch of Santander One Pay FX is the first of many potential applications.”