The Bank of America is developing a trail based on the blockchain for trade finance transactions in an attempt to tap into the applications of blockchain or distributed ledger technology for real world applications.
Bank of America has revealed the development of a blockchain-based trial for trade finance, as a part of the financial institution’s foray into pushing for the adoption of the underlying technology that powers Bitcoin.
The application of blockchain technology to trade finance is seen to be as a significant leap for an industry that still relies predominantly on manual, paper-based processing, as reported by Financial News.
Speaking to the publication, Jason Tiede, head of innovation for global transaction services at Bank of America, stated:
We are working on a pilot in the trade finance space. As trade finance often relies on manual, paper-based processes, it serves as an interesting use case of the value of digitizing an asset on a distributed ledger.
Tiede also revealed that the trade finance pilot based on blockchain tech is being developed with another unnamed bank and could be ready for real-world testing by late spring 2016.
The news of Bank of America’s endeavor into developing blockchain tech specifically for trade finance comes in the months after it was revealed that the financial institution filed for a number of cryptocurrency patents in recent times.
Bank of America originally filed for a patent on a system of wire transfers using cryptocurrency, published in September 2015. In December 2015, the US Patent and Trademark Office (USPTO) published 10 patent applications filed by Bank of America in relation to cryptocurrencies, originally filed in June 2014.
It was then revealed that Bank of America was drafting up to 20 more patents to be submitted to the USPTO in January 2016, this time in relation to both cryptocurrencies and blockchain technology.
Furthermore, Bank of America is also among the R3-led private blockchain consortium that has 42 of the world’s biggest banks coming together to explore and develop blockchain technology applications to present day banking processes.
Bank of America’s own foray to develop blockchain tech for trade finance specifically follows London-based Standard Chartered and Singapore-based DBS’ efforts to develop distributed ledger for the trade finance industry. With the aim of deploying the proof-of-concept system this year in Asia, the two banks have already tested the technology among themselves, using Ripple’s distributed ledger technology.
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Last modified: May 21, 2020 10:32 AM UTC