More than 30 consortia comprising mainly financial institutions are working on blockchain applications according to a recent report published by Trade Finance Global (TFG).

Several blockchain or distributed ledger solutions specifically aim to provide solutions for letters of credit (L/Cs).

Growing consortia

According to TFG, most consortia comprise 10 and 15 initial members but membership is expected to grow.

The advantages of joining a consortium include risk sharing and that blockchain systems tend to become increasingly effective as the number of participants increases.

In the trade finance space, participants include customs organisations and regulators as well as financial institutions. Multinational companies also join blockchain consortia.

Active L/C consortium

One of the most active blockchain group focused on L/C applications is the Voltron consortium that now includes more than 50 banks and corporates following the completion of trials.

The trials involved simulating multiple digital L/C transactions across 27 countries on six continents (DC World News, 17 May 2019).

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