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StanChart makes its first Singapore trade finance deal using blockchain

STANDARD Chartered's Singapore unit has pulled off its first cross-border trade finance transaction on a blockchain-based platform, after previous initiatives by other arms of the global lender.

StanChart tapped startup Distributed Ledger Technologies' platform to complete an agri-business supply chain deal in one day, instead of the normal five to seven, the bank announced on Thursday.

The blockchain technology, which enables parties in the supply chain network to be connected and their trade documents to be generateddigitally, streamlines the documentation process and provides security and transparency for participants, said the bank.

StanChart said it intends to expand the blockchain-based supply chain solution to more clients both regionally and globally.

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The technology involved digitally generating trade documents for Singapore agri-commodities trader Agrocorp International, to get a shipment of chickpeas from the source in Australia to the customer, BSM Global, in Bangladesh. Information that was shared along the supply chain network included data on the origin of commodities and the farming practices that were used.

Ujjwal Jain, head of trade for the Singapore transaction banking business, said in a statement that the use of blockchain-based platforms "enables the bank to support our clients' entire supply chain and provide seamless trade financing within a day".

"This helps free up cash flow and working capital, which our clients and their supply chain can reinvest into their business," he added.

"The transparency of the whole process also helps build trust and loyalty across the supply chain to promote more cost-efficient products and services. This is a win-win for all parties."

The bank had previously worked elsewhere on blockchain-based trade finance projects, including a transaction in 2017 for a leading international logistics provider on the TradeIX platform, and a smart guarantees pilot in 2018 with Siemens Financial Services and TradeIX.

TradeIX, raised US$16 million in a 2018 Series A funding round led by Dutch bank ING's venture capital arm and supported by, among other investors, France's BNP Paribas.

StanChart's latest blockchain partner, Singapore-based Distributed Ledger Technologies, was registered in 2018, with a paid-up share capital of S$500,000.

It took part in the Infocomm Media Development Authority's Blockchain Challenge for industry solutions and was picked to work with Schneider Electric, STMicroelectronics and Flextronics Manufacturing on developing a blockchain-based solution for electronics manufacturing supply chains.

Samir Neji, its founder and chief executive, said: "As supply chains intertwine and evolve, demands for new features will intensify. Not only do transactions need to be seamless and safe, clients are increasingly looking for innovative solutions that save them time and costs."