Standard Chartered’s SC Ventures is a backer of both the SWIAT tokenization blockchain and Olea, the trade finance startup. Now the two companies are collaborating in the tokenization of trade finance assets.
We’ve written about SWIAT many times, especially with its recent involvement in several bond issuances as part of the ECB’s wholesale DLT settlement trials. DekaBank founded SWIAT, which operates a private permissioned ledger and is now a joint venture with SC Ventures, LBBW and others.
As part of the Olea alliance, DekaBank is the funder of the first trade receivable tokenized on SWIAT, which involves a Hong Kong supplier, with Singapore’s Olea as the asset originator.
Olea is a joint venture between SC Ventures and Chinese supply chain finance platform LinkLogis, in which StanChart is also an investor. LinkLogis has used DLT from the beginning, targeting the Chinese market, whereas Olea has an international focus. Olea also aims to broaden the range of funding institutions and expand trade finance as an asset class.
When the partners unveiled the Olea joint venture in 2021, CEO Amelia Ng said, “Olea aims to disrupt today’s trade finance model by matching suppliers’ financing needs with alternative liquidity from investors seeking a compelling asset class linked to the real economy.”
Trade finance tokenization
One way to do that is to tokenize trade finance assets. It’s possible to achieve that either via banks offloading the trade finance they’ve already extended and selling it via tokens as secondary market transactions. Alternatively, investors can provide primary trade funding to suppliers and receive the tokenized assets in return. It was confirmed that this is a primary market transaction.
“SWIAT enables Olea to issue digital assets, while Olea addresses the challenges of the global economy by tapping into alternative funding sources from institutional base investors,” said Gurdeep Singh Kohli, SC Ventures Lead for Europe and Americas.
Earlier this month, Olea received a capital markets license in Singapore.
Update: added clarification regarding this being a primary market transaction.
