Blockchain is gaining traction as a means to settle transactions done across borders.
To that end, reported The Wall Street Journal (WSJ) this past week, a group of 14 financial firms, led by UBS, plans to use blockchain to help settle cross-border trading activity, marked by the use of a token to be called a utility settlement coin (USC). The 14 banks, which span Europe, Japan and the U.S., have invested as much as £50 million (nearly $6.35 million USD) in the venture, with the blockchain-based initiative tracing back four years.
“The USC token would function both as a payment device and messenger that carries all the information required to complete a trade, potentially cutting down on a transaction’s time and cost,” reported the WSJ.
The trades would settle much more quickly than the days or weeks that typically mark settlement periods. Other banks include ING Group, Banco Santander, KBC Group and others.
“You remove settlement risk, the counterparty risk, the market risk. All of those risks add up to costs and inefficiencies in the marketplace,” said Hyder Jaffrey, head of strategic investment and FinTech innovation at UBS, according to the WSJ.
The USC token is to be backed by currency held by the participant banks.
The news follows headlines from earlier this year when JPMorgan Chase disclosed it was working on a coin for trade finance — the JPM Coin. The bank introduced the Interbank Information Network last year, which uses blockchain to share information between banks on the platform, which now numbers at 250.
MediLedger will be used to track pharmaceutical items in a pilot program beginning this month, according to Cointelegraph. The efforts are being done in cooperation with the U.S. Food and Drug Administration (FDA). Walmart joins pharmaceutical companies such as Pfizer, McKesson and AmerisourceBergen to develop and collaborate on the blockchain network, focused on data sharing within the supply chain.
Among other supply chain initiatives, in Europe, French retailer Carrefour said it got a sales boost through the use of blockchain.
According to CoinDesk, Carrefour Blockchain Project Manager Emmanuel Delerm said distributed ledger technology (DLT) has helped to track meat, fruit and other items as they’ve made their way across supply chains, and sales have grown. The company’s blockchain tracking processes are built on IBM’s blockchain technology, and use QR codes scanned into the system. The data includes packing dates and shipping details.
The Carrefour executive noted that its efforts have been especially successful in China. Through the initial launch, 20 items are being tracked, and 100 more are slated to be added to the system. Consumers can track details such as sourcing and organic products.
Carrefour is also working with Nestlé, giving the latter firm access to its blockchain data for Mousline potato puree. Buyers are able to track the sourcing of the puree, said reports.