The National Bank of Canada has announced completing its successful pilot blockchain project in collaboration with the IT company CGI and Skuchain to use blockchain technology in trade finance. How will the banks benefit from the program?
23 October 2018 | AtoZMarkets – The National Bank of Canada (NBC) has announced the successful completion of a pilot project in partnership with the IT company CGI and blockchain startup Skuchain, to use blockchain technology to simplify the processes in trade finance.
According to the press release, the initiative is to improve and streamline the complex process of conditional agreements used by banks for securing financial transactions.
These agreements are used across many industries to secure smart contracts and the procedures are currently conducted via email, making them subject to errors and delays.
How Does NBC Blockchain Project Benefit Banks?
The NBC said that with the combination between CGI’s Trade360 trade finance platform and Skuchain’s smart contract creation software, the processing times are remarkably improved, risks are reduced and customer relationships are strengthened.
The integrated platform automates the coordination required to issue a standby letter of credit or guarantee by leveraging templates that have been pre-approved by banks and negotiations on a distributed ledger.
The newly simplified transaction process provides visibility across the lifecycle, reduces costs for all relevant parties, increases security and makes collaboration more effective.
In his turn, Patrice Roy- the vice president of payments, cash management and international solutions at the National Bank of Canada, was quoted as saying:
“This pilot project is a great opportunity to leverage blockchain technology to simplify the process for negotiating standby letters of credit and guarantees while making it more transparent and secure. This will enable us to offer a simple, fast and efficient experience to our commercial clients which facilitate managing their business.”
JPMorgan Quorum Blockchain Platform
Observers see that the NBC’s successful pilot project with CGI and Skuchain is one of its many blockchain initiatives the bank has undertaken to explore the merits of the technology for varied applications.
The media reported earlier in April 2018, the NBC and JP Morgan tested a new Quorum platform, an open-source blockchain designed for issuing financial instruments and seeks a well-organized origination, settlement, interest rate payments and other processes.
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