Agrifood trading giant Cargill closes a deal with HSBC and ING with a cargo of soybeans exported from Argentina to Malaysia. It was completed using the R3 Corda platform and the company’s first live, commercial trade finance transaction using the technology of blockchain.

Twelve banks have developed the letter of credit (LC) module of Corda that enabled an amazingly speedy transaction time of 24 hours from the usual standard of 5-10 days. The LC which was executed on blockchain was issued by HSBC while ING acted as its advising bank.

As the company begins to adopt blockchain with their initial transaction using the technology, Vivek Ramachandran, HSBC’s global head of innovation and growth for commercial banking can see more of these live transactions on the same platform in the future . An industry-wide adoption can happen as the bank learns how it interacts with the systems of other banks and companies. He hopes to be able to demonstrate how a live commercial transaction with a flagship global trader and two global banks on each side of the transaction can work.

The bank’s managing director for innovation in wholesale banking, Ivar Wiersman, sees clear client benefits in speed and ease in execution and is happy that the Cargill transaction was completed successfully.

The industry has tested the use of blockchain for a couple of years before this. In 2016, Commonwealth Bank of Australia and Wells Fargo used a blockchain-based solution to close a US$35,000 transaction for two subsidiaries of Brighann Cotton. Eighty-eight (88) bales of cotton were taken from Texas, USA to Qingdao, China using Skuchain’s Brackets blockchain.

Since then, more trials on using blockchain were attempted by various companies. However, it has not been brought to operational trade finance.

IBM developed a blockchain-based trade finance platform called Batavia , on which its first live transactions with corporate clients were completed in April, along with a consortium of five banks.

A platform called “we.trade” that manages, tracks and protects trade transactions between SME’s aims to launch to business clients this year. It is a European platform backed by 9 banks.

A government-backed invoice financing platform went live in India using blockchain so companies involved can share information to prevent double-financing.

HSBC’s senior innovation manager, Joshua Kroeker, has informed GTR that the bank was ready to do live trade finance transactions on the same technology. They had a blockchain project for trade finance previously with Bank of America Merrill Lynch and the Infocomm Development Authority of Singapore (IDA) on a proof of concept to mirror letters of credit using distributed ledger technology.

This Corda platform seems to be the most advanced trade finance development on blockchain to date . It is owned by R3, a US company founded by David Rutter, with members of more than 200 banks, financial institutions, regulators, trade associations, professional services firms and technology companies.

The first to go live on the Corda platform is an application piloted by several banks (BNP Paribas, BNY Mellon, HSBC, ING, Natixis, State Street) and developed since 2017 by fintech company Finastra and R3. It was created in April for Fusion LenderComm, an application for syndicated loans.

ING was reported to be working with Mercuria and French bank Societe Generale to build a blockchain solution for oil trading last year. It has also been working with Fusion LenderComm.

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![hsbc.jpg](https://steemitimages.com/DQmY3FRrzutgA5ugkwrqbtFzJvtNrxhsreRxxnaVdxthNiZ/hsbc.jpg)

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