Financial messaging service SWIFT has said it has entered into a partnership with R3, a leading consortium amongst several initiatives developing blockchain platforms for trade finance operations.

R3's Corda platform facilitates end-to-end processing of blockchain-based letters of credit (L/Cs).

Integration plans

The partnership will integrate the R3 platform into the SWIFT global payments innovation (GPI) offering.

Chief executive officer of SWIFT, Gottfried Leibbrandt, says the messaging service and R3 are developing a proof-of-concept exercise in which a payment is initiated on the Corda trade platform, which is then linked with GPI.

Financial institutions will use Corda to authorise, manage and settle payments through a gateway known as the GPI Link.

Landmark transaction

In November 2018, BNP Paribas and HSBC Singapore completed the country's first fully digitised end-to-end L/C transaction between two different companies in an iron ore deal in which Rio Tinto was the seller and Cargill the buyer.

Both BNP and HSBC enabled a transfer of electronic bill of lading (eBL) over traded goods using a digital L/C for the first time in Singapore, by integrating the Voltron trade finance solution (through R3's Corda blockchain platform in the back-end) with Bolero's eBL system (DC World News, 23 November 2018).

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