Standard Chartered and Siemens will transfer work with bank guarantees to blockchain
International banking firm Standard Chartered has entered into an agreement with the financial arm of the manufacturing giant Siemens as part of a pilot project to use blockchain to issue bank guarantees in the field of international settlement of trade transactions.
According to IBS Intelligence, the program, which is also assisted by digital ledger company TradeIX, aims to eliminate paperwork and digitize the process from start to finish using automated smart contracts..
Developed on the open source platform Corda from blockchain consortium R3 and applied at the application level by TradeIX, this “industry standard solution will transform the way bank guarantees are issued and processed,” said Motazim Iqbal, Standard Chartered’s head of operations. service in the UAE.
According to the article, if the pilot project is successful, it is – i.e. digitizing the issuance of guarantees, as well as processing claims and making changes to the terms of the guarantee – will allow companies like Siemens to serve their large customers more efficiently.
Siemens Chief Financial Officer Michael Bucker believes that integrating a blockchain financial tool into the company’s day-to-day operations will “simplify processes and make international trade settlements more streamlined, faster and more efficient.”.
The test project was launched in March and should be completed in 2018.
This is not the first time Standard Chartered has tried its hand in the blockchain field – back in 2015, the bank praised the potential of using blockchain in the field of international settlements for trade operations..
After a couple of years, Standard Chartered went from words to deeds and joined several test projects related to the blockchain. For example, about a month ago, the bank became a partner of a blockchain money transfer service launched by Ant Financial, a subsidiary of the Chinese e-commerce giant Alibaba..
Like letters of credit, bank guarantees are issued by credit institutions as a promise that the debtor’s obligations will be fulfilled..
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