Today BNY Mellon announced that he was part of the Marco polo blockchain trade finance network. Ledger Insights first revealed the news almost two years ago. This is why we asked the bank to confirm if it is now in production.
Marco Polo has more than 30 member banks in the network and around 20 companies. The first banks to go into production earlier this year were Commerzbank, LBBW and Turkish bank İşbank, and SMBC processed a live transaction in August.
One of the remarkable characteristics of Marco Polo is its integration with banking systems and enterprise ERP. But the solutions still have to be connected via APIs, and this can take time.
BNY Mellon described the benefits he sees from using the solution. The first is the real-time visibility that a bank has on purchase orders and supplier invoices, given the authorized ERP visibility. Since the data is accessible in real time, funding can be provided much faster. Digitization and automation are particularly useful for large organizations that can issue thousands of invoices per day.
“Blockchain has the potential to transform the trade finance industry by replacing multiple systems with a single record shared through a distributed ledger,” said Joon Kim of BNY Mellon Treasury Services.
“As all participants in the transaction will be immediately informed of every evolution of the transaction lifecycle, this allows us to extend working capital faster and more securely to clients. “
BNY Mellon notes that the blockchain can reduce the risk of the same invoices being used at multiple banks. While this is true, it only works between banks that are on the same network. Therefore, SWIFT is exploring a solution that aims to solve this problem of double funding across multiple networks.
Other benefits of blockchain include the ability to use trade finance assets among network members and track environment, social and governance (ESG) based on company scores provided by Marco Polo.
The trade finance platform supports bank payment commitments and open account working capital financing. It is backed by R3’s Corda enterprise blockchain.
Meanwhile, BNY Mellon is involved in many blockchain initiatives. He recently launched a digital asset division and invested in digital asset custody technology company Fireblocks. He is also experimenting with SGX’s Marketnode in Singapore using blockchain for bonds. And it’s a member of Fnality, which plans to launch an interbank settlement token for use by its 14 member banks and the Nasdaq.