A consortium of banks, insurance companies, trading conglomerates and shipping and logistics companies are pressing ahead with TradeWaltz, a trade information management system developed by NTT Data, that will offer letters of credit (L/Cs) issued by banks and related documents handled by insurance and logistics companies.

The TradeWaltz system is not entirely locked into blockchain solutions and aims to address one of the key challenges faced by blockchain consortia, digital islands.

Digital islands

The problem with digital islands is that deals over some purely blockchain systems are difficult because there may only be a one or two dozen banks with the technology and capabilities to support fully digital deals whereas trade and trade finance only work when there is a sufficient number of counterparties.

The TradeWaltz solution incorporates structured documents, not PDFs, although they can be attached.

This means that if a bank issues an L/C but the counterparty bank cannot support TradeWaltz, the structured document can be used to print out paper documentation that can be sent to the counterparty in the old fashioned way.

TradeWaltz participants

The new venture aims to attract around 400 companies as clients and already includes trading conglomerates Itochu Corporation, Kanematsu Corporation, Marubeni, Mitsubishi Corporation, Mitsui & Co, Sojitz Corporation, Sumitomo Corporation and Toyota Tsusho Corporation.

Banks include Mizuho Bank, MUFG Bank and SMBC; participants in the insurance sector include Mitsui Sumitomo Insurance, Sompo Japan Insurance, Tokio Marine & Nichido Fire Insurance while shipping and logistics operators are represented by K Line, NYK Line, ONE and Nippon Express.

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