UBS, IBM Flag First Blockchain Trade Transactions

Their Batavia platform pilots two live operations between corporate clients

by Marin Marinov
19 April • 2 min
In News

Тrade finance platform Batavia, backed by Swiss commercial bank UBS and US technological company IBM, has completed two pilot trade transactions using blockchain, the technology behind cryptocurrencies, IBM said on Thursday. The test included real trading operations between corporate clients with different characteristics and claims to be the first transaction in this field.

Unlike traditional banking transactions, contracts were automatically made without the need of bank intermediary that makes operations faster and more transparent. The platform used smart contracts that were generated and recorded on the blockchain of IBM:

“The members of Batavia have demonstrated how sharing data among permissioned network members can accelerate cross-border trades and bring new transparency to the financial system, both in real-time and at scale,” Jason Kelley, general manager of IBM Blockchain Services said in a statement.

The pilot transactions

Batavia platform enabled sale of cars from Germany to Spain and purchase of textile raw materials from Austria to Spain. The test operations included end-to-end trading transactions by connecting buyers and suppliers with banks automatically. Batavia claims to have successfully integrated track, trace and risk management tools.

The project started in 2016 by IBM and the largest UBS, has attracted several leading global financial institutions, including Spanish CaixaBank, Canadian Bank of Montreal (BMO), German Commerzbank and Austrian Erste Group. It aims to simplify the trading transaction cycle and to build consumer trust by using the transparent technology behind cryptocurrencies:

“Because this trade finance platform is built on blockchain, there is a single, distributed version of all documentation that is shared across the involved participants of such trade. That means everyone has the information they need to do their due diligence and complete the transaction and sees therefore the same truth like all other involved parties” Fabio Keller, Senior Client Executive at joint IBM-UBS Account Team explains.

Blockchain and bank transactions

Batavia’s next step is building a production-ready solution,Keller said on the IBM Blockchain blog.  The two pilot transactions come just days after major developments in blockchain implementation in bank activities were revealed. Last week, Spanish banking group Santander launched an international DLT-based payment service and the Japanese banking giant SBI joined the R3 Corda consortium for development of blockchain-based transactions.