Blockchain transactions for palm oil trade finance transaction.

As Blockchain technology continues to make its way into the field of finance, we take a look at how it is helping to secure international payment structures and enable us to perform these transactions much efficiently and effectively.

By SIRJAN KAUR KOHLI | 2min read  

IFFCO Singapore (ISPL) announced the launch of its trade and finance blockchain platform developed by blockchain firm Dltlegders. The company completed its first live transaction for moving Palm Oil and extracts for IFFCO Group from Malaysia and Indonesia to the Middle East with support from Standard Chartered. UAE-headquartered IFFCO is a major agribusiness company in the region. It also produces foods such as confectionery, cakes, ice cream and others. 

ISPL said the digitized trade transaction involved both import and export processes and took three hours to complete against the 10-day paper-based process. The firm said it is using blockchain for invoice financing in terms of buying and digital validation for Document against Acceptance (DA) in terms of selling.  The firm claimed this to be  the first-ever blockchain digital validation, which guarantees payment against a bill of exchange if the importer defaults.

This is a development that could have far reaching implications for businesses. The important thing to remember is that the deal represents a landmark moment for global business and shows that blockchain can be used quite effectively to speed up international trade.

The end to end fully digitised trade execution and trade finance transaction, involving both import and export processes and multiple parties was executed in 3 hours as against a 10-day paper process otherwise in a seamless flow with digital connectivity on Dltlegders blockchain platform. ISPL could execute multiple transactions in a day via the Dltledgers blockchain platform improving their process efficiency and realised margins in dollar value terms. This move to a digital system based on Dltlegders blockchain is part of the business strategy to enter the digital space to leverage on innovative emerging technologies involving smart contracts, smart documentation and digital consensus in blockchain, and have access to earlier financing from bank as the documentation flow is much closer to real-time. This will help ISPL in strengthening and diversifying their business operations.