Today DBS Bank announced it executed its first trade finance transaction on the Trusple blockchain for Singapore SME iQuartz. The transaction for around $40,000 was for artificial construction stone materials known as ‘quartz stone’.
Trusple uses Ant Group’s AntChain to register the purchase order on the blockchain enabling transparency. Once it’s acknowledged, the supplier can raise finance for a bank payment guarantee or invoice financing. Banks are keen on this because they have greater confidence that the transaction is genuine.
Apart from the usual trade finance advantages of guaranteed payment to the supplier, the solution radically reduces friction for the supplier. DBS is now live for the Singapore – China trade corridor.
“SMEs are increasingly looking to tap on regional opportunities to access new markets and fortify their supply chains but are often daunted by complex trade processes,” said Joyce Tee, DBS Group Head of SME Banking. “By leveraging emerging technologies such as blockchain, DBS is lowering the barriers for SMEs to participate in Asia’s post-pandemic economic revival as cross-border trade activity in the region picks up.”
While DBS Bank may be the first to go live in Asia, when the solution was first unveiled six months ago, several major international banks had already signed up, including BNP Paribas, Citi, Deutsche Bank and Standard Chartered.
Numerous blockchain solutions are targeting supply chains such as IBM and Maersks’ TradeLens and trade finance such as Marco Polo, Contour, komgo and we.trade. But apart from we.trade, most don’t target SMEs, nor do they have Ant’s pedigree in e-commerce and finance from Alibaba and Alipay.
In other news, it hasn’t been an easy ride for Ant since it pulled it’s giant IPO last year. The company is being forced to restructure to be more like a financial holding company, and last week its CEO stood down.
