IBM has announced a partnership with Singaporean port operator PSA International and Pacific International Lines (PIL), the largest shipping firm in Asia, to study blockchain applications in trade finance.
The companies have signed a Memorandum of Understanding (MOU) and will jointly work on proof-of-concept blockchain solutions that are expected to enhance the efficiency of the supply chain network in Asia. The technology will facilitate business-to-business interactions between suppliers, financial institutions and distributors and will help to reduce the risk of fraud, prevent error, and cut costs.
According to Tan Chong Meng, group CEO of PSA, blockchain holds great potential and can transform a variety of sectors, such as pharmaceutical, food and trade finance.
“Across the global movement of goods and cargo, many activities continue to operate in silos. Blockchain has the potential to reduce inefficiencies and gaps within the supply chain, promote more cost-efficient transactions and facilitate the continued growth in world trade,” he said. “PSA looks forward to working alongside its partners in supporting this initiative and we will contribute our expertise and knowledge in managing ports and advancing supply chains.”
“Blockchain as the foundation of an immutable, security-rich, highly auditable and transparent shared business network, offers improved transparency, data security, and workflow productivity in complex business networks,” said Randy Walker, CEO of IBM Asia Pacific.
“IBM will leverage the Hyperledger Fabric platform, its Supply Chain Business Network, and expertise from the IBM Center for Blockchain Innovation in Singapore to pioneer projects with the potential for widespread impact across industries in China and Southeast Asia.”
IBM has already worked with the Port Authority of Singapore to investigate the blockchain technology and its use in global trade and logistics. In March, it teamed up with transport company Maersk to use the technology for managing the supply chain for container shipping.
Over the last few months, IBM announced a number of new partnerships related to the technology, including those aimed at accelerating financial transactions. In June, it unveiled plans to build blockchain platform for seven of Europe’s biggest banks, such as Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale and Unicredit. The new system will facilitate domestic and cross-border trade for small and medium enterprises in Europe and improve transaction transparency.
Last month, IBM entered into agreement with Borsa Italiana, a subsidiary of London Stock Exchange Group, to digitize shareholding structures and facilitate cap table management.
Among other blockchain initiatives the company started this year is the development of a blockchain-based insurance policy to manage complex international coverage. The IT giant partnered with Insurer American International Group Inc (AIG) to jointly create a system for arranging multinational insurance contracts through blockchain.