Three years ago Standard Chartered created a joint venture, Olea, with Chinese supply chain finance platform LinkLogis, which uses blockchain. Olea’s goal was to offer trade finance investments as an alternative asset class. In other words, it sells trade finance assets to investors. Today it announced that the Monetary Authority of Singapore granted it a Capital Markets license. We believe the plan is to tokenize trade finance, or it certainly was three years ago.
Olea has already been selling trade finance assets, and recently reached a US$1 billion milestone.
Finding alternative sources of funds is one path to addressing the $2.5 trillion trade finance gap.
“As Olea continues to empower sustainable trade across Asia, obtaining the CMS License underscores our commitment to building a bank-like compliance and professional standards,” said Amelia Ng, CEO, Olea. “Achieving our $1 billion throughput milestone indicates the confidence funders have in Olea’s asset class and demonstrates the significant demand for our innovative trade finance solutions to companies in Asia.”
Other eye tokenizing trade finance
If Olea tokenizes trade finance assets, it won’t be the first to do so. There are already a mix of solutions, some more bank focuses and others closer to the crypto world. For example, Trade Assets launched a secondary market in Dubai and says it has traded $3.5 billion. While it initially started with many Bangladeshi banks, the range has expanded to include some big name members in the Middle East, such as FAB, Emirates NBD, SABB and Japan’s SMBC.
Meanwhile, Tradeteq launched a conventional platform, initially as an outlet for banks. Its throughput is more than $12 billion. More recently it partnered with the XDC public blockchain network to tokenize trade assets.
Ant’s web3 arm ZAN and the Hong Kong GSBN shipping network are also collaborating to tokenize electronic bills of lading (eBL).
A handful of crypto focused startups provide trade finance and use blockchain to source funding from investors, such as Credix. Centrifuge was started by a team from supply chain platform Taulia, but has since pivoted away from trade finance to focus on ‘real world assets’ more broadly.
