An Irish company has become the first in the world to close a deal using new blockchain technology.
Ireland’s biggest dairy exporter has become one of the first companies in the world to close a global trade transaction using so called blockchain technology.
UK bank Barclays and Israeli startup company Wave executed the transaction – a letter of credit transaction between Ornua (formerly the Irish Dairy Board) and Seychelles Trading Company.
It’s the first deal to have trade documentation handled on the new Wave blockchain platform, with funds sent via Swift.
Barclay’s said the landmark transaction could herald a new era of simpler, safer and faster trade finance.
Blockchain, or open ledger technology, is a system for permanently storing information on networks of unrelated computers, without a central or organising authority.
It emerged from the development of the Bitcoin cyber-currency, but is now seen as a potentially safe way of recording all kinds of financial transactions.
Crucially, the technology is seen as a proof against fraud, because in theory no single institution can control the blockchain, making it close to impossible to falsify records.
Barclays is one of a number of big banks racing to adopt blockchain for finance.
It said trade transactions such as letters of credit typically involve high numbers of participants in different jurisdictions, with a significant amount of paperwork, counter-signing and courier journeys required to seal contracts.
Blockchain technology eliminates many of those steps, speeding up trade transactions, reducing costs and potentially the risk of documentary fraud.