Information technology and business process services provider, CGI Group, along with the Bank of Montreal, Royal Bank of Canada, and Mitsubishi Financial Group say they have successfully completed a first-ever proof of concept (POC) that successfully demonstrated streamlined letter of credit (L/C) and other trade finance processes on a blockchain platform.

The developers of the concept say it enables banks engaged in trade finance to integrate powerful blockchain capabilities with existing trade finance platforms, potentially leading to improved productivity and reduced costs while providing customers with a competitive advantage.

Trade finance platform

The POC established seamless interoperability between CGI Trade 360, a bank trade finance platform, and Skuchain Brackets, a distributed ledger business-to-business (B2B) platform for smart contracts according to the developers.

They say this is the first time a trade finance platform and a blockchain-based platform have been integrated to demonstrate how banks will be able to provide trade finance services digitally to their customers conducting business on blockchain B2B platforms.

L/C processing

The developers also claim the POC successfully demonstrated streamlined processes for digitalising L/C processes, including applications, issuance, advisement, presentation of documents, bank examination and payment notification.

Instantaneous delivery of electronic documents could reduce the in-transit time required for conducting such business from days to minutes.

Skuchain and CGI Skuchain is a blockchain technology company focused on transparency, security and efficiency along the supply chain for the benefit of both buyers and suppliers.

Founded in 1976, CGI Group is the fifth largest independent information technology and business process services firm in the world. Listed in New York and Toronto, it has 70,000 employees located across the Americas, Europe and Asia Pacific.

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