The Singapore branch of CIMB Bank Berhad announced Thursday that it has completed its first structured trade financing transaction on a blockchain, together with iTrust, according to a Press Release today.
The transaction was successfully conducted on iTrust’s Blockchain and Internet of Things (IoT) platform, and it includes the financing of dairy products imported into China. All documents from the transaction remain provenance and immutable as they are stored on the blockchain.
Following the development, CIMB expects that the system will generate at least US$100 million transaction flows on a yearly basis, while also providing real-time visibility of cargo in transit or warehouse, according to the report.
With iTrust’s blockchain-based IoT, ensuring the security, transparency, and visibility for the documents and cargo, CIMB further spelled a hope that the system also mitigates risks related to commodity trade financing, as well as facilitate credit extension for its customers.
The technology allows stakeholders to experience a highly secured operational dimension of the transaction, an effort that was previously absent, with the CEO of CIMB Bank Berhad, Mr. Mak Lye Mun adding that it will also “present an opportunity for CIMB Bank Singapore to support our customers more efficiently and cost-effectively.”
Apart from combating fraud risk, CIMB noted that the technology also alerts them about the unauthorized movement of the financed cargo.
“Given the rapid technology shifts in the market today, we will continue to focus on digitalization and customer experience to transform the way we finance our corporate customers, thus adding value to our services,” the CEO added.
In a report on September 25, one of the “Big Four” clearing banks, Lloyds Bank Commercial Banking, revealed plans for a blockchain-based international commodity trade business, in partnership with Komgo.
The move aims at addressing the challenges facing its international commodity trade business, such as the “cumbersome” and “time-consuming” processes associated with the current global trade system.
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