Mizuho of Japan is one of the latest financial institutions to announce the results of an experimental blockchain letter of credit (L/C) transaction.

The bank conducted the experiment alongside Japanese trading conglomerate Marubeni Corporation and Sompo Japan Nipponkoa Insurance.

International experiment

The experiment involved information sharing between Japan and Australia with all trade-related processes, from issuing the L/C to delivering trade documents, completed entirely via a digital platform using blockchain, according to Mizuho.

It said the results included faster document delivery times, increased transparency and reduced labour costs.

Due caution

The bank is nevertheless cautious about prospects for rolling out the system any time soon. "It is not possible to transmit trade transaction information in digital blockchain / DLT [distributed ledger technology] format to parties who do not use the platform; transactions must be conducted as before," according to a Mizuho statement.

"Building on this trade transaction project, Mizuho aims to further explore the practical business application of blockchain / DLT and to offer technologically sophisticated, client-focused services going forward," the statement added.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.