Nordic banking institution Nordea has now widened access to its blockchain-based trading platform we.trade by allowing small and medium-sized enterprises (SME) to use it.
Its Global Head of Trade and Finance and Working Capital Management, Patrik Zekkar, said that this should help in reducing the “trust deficits” in cross-border trade, seeing that more than half of SMEs are forced to make payments before receiving goods or services:
“Almost 60 percent of the SME’s said that they have to make advance payments so there is obviously a sense of insecurity surrounding cross-border trade. This is unfortunate, not only from a liquidity standpoint, it may also lead to companies refraining from trading and not growing.”
The platform allows users to utilize smart contracts to select certain conditions that, when met, will trigger a payment to another party. This means automated release of payments upon meeting contractual agreements, preventing fraud and reducing disputes.
A dozen banks make up the IBM Blockchain-based platform, includin Deutsche Bank, HSBC, KBC, Rabobank, Santander, Société Générale and UniCredit, and was joined by Nordea in 2017. A soft launch last month saw its very first customers being served.
Since their first trials in July 2018, we.trade has claimed the first commercially-viable trades that harness blockchain technology.
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