IBM and Banks Develop Blockchain Platform Batavia

German Commerzbank, Austrian Erste Group Bank, Spanish Caixabank, and Canadian Bank of Montreal have joined the initiative of Swiss UBS and American technology giant IBM, which are developing blockchain technology for trade finance purposes.

The Batavia platform would help banks and their clients automate the trade finance process, which is still largely performed manually and on paper, the participants of the initiative reminded in a statement on Wednesday.

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Batavia will, among other things, enable users to track transactions from the shipment of goods to their delivery to the customer.

Blockchain was originally developed for trading the cryptocurrency Bitcoin. It is a shared ledger maintained by computers, rather than central institutions like a central bank.

In recent years, banks have invested millions of dollars in adapting blockchain technology for use in specific complex processes involving vast amounts of data.

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The general assessment is that blockchain could serve well in trade finance due to the large number of participants in these transactions, including financiers, buyers, sellers, carriers, and inspectors.

Currently, each of them maintains their own accounts, which can lead to errors and delays. The new platform is expected to provide all participants with a shared ledger, thereby reducing errors and enabling a greater number of transactions.

– Trade finance offers a perfect opportunity for the application of blockchain due to the large number of participants in the trade ecosystem, especially when we talk about global trade, emphasizes Marie Wieck from IBM Blockchain in an interview with Reuters.

– Digitalization and building trust are perfect incentives for business, she adds.

The platform will also utilize so-called ‘smart’ contracts, or computer programs on the blockchain that will automatically execute the terms of agreements. For example, Batavia will make payments in accordance with specific stages of the trade process.

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The financial industry is currently experimenting with blockchain, but these experiments are still in the early stages, and some warn that it may take several years to see the first concrete results.

IBM is simultaneously collaborating with Swiss food giant Nestle, British-Dutch consumer goods manufacturer Unilever, American retail giant Wal-Mart Stores, and other major food and retail companies on a separate blockchain-based project focusing on tracking food supply chains.