Multinational Spanish banking group BBVA, in collaboration with technology firm Wave, has carried out its first blockchain based letter of credit (L/C) transaction between Europe and Latin America.

Wave's solution, which uses distributed ledger technology and blockchain, enabled the bank to reduce the time required to send, verify and authorise an international trade transaction to just 150 minutes. Such a transaction normally takes at least seven days according to a BBVA statement.

Real transaction

The pilot transaction used blockchain to automate the electronic submission of documents in an import-export transaction.

The pilot was run on an actual sale transaction between Mexico and Spain, in which a Spanish company bought frozen tuna from a Mexican supplier.

Time saving

The transaction involved a large volume of documentation that can take up to a fortnight to execute.

During the 150 minutes it took for the transaction to be executed, all documentation was visible to the participating banks as well as the importer and the exporter.

Flexible system

Wave's system made it possible to make changes or corrections required from the moment the goods were loaded until their arrival at their destination.

The pilot also included electronic signatures on documents, simultaneous distribution of copies to all parties and the reception of the ownership of the documentation at each step along the way.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.