CIMB Bank Berhad Singapore Branch and iTrust have successfully completed their first structured trade financing transaction on iTrust’s Blockchain and Internet of Things (IoT) platform, according to a statement.
The deal involved the financing of diary products imported into China that could be worth US$100mn a year. The bank’s technology partner, iTrust, a technology firm based in Singapore.
iTrust provides secured real-time visibility of the cargo in transit and in the warehouse using blockchain-based IoT. All data and documents from the transaction are carried out on blockchain.
The technology provides all stakeholders with a secured operational dimension of the transaction, which CIMB believes will help mitigate risks associated with commodity trade financing and facilitate credit extension for their customers.
Said Mr. Mak Lye Mun, CEO of CIMB Bank Berhad, Singapore Branch:
“This blockchain trade financing with iTrust will present an opportunity for CIMB Singapore to support our customers more efficiently and cost-effectively,” said Mak Lye Mun, chief executive of CIMB Bank Berhad, Singapore Branch. “It mitigates fraud risk and alerts us of any unauthorized movement of the financed cargo.”
“With iTrust, we have used blockchain-based IoT to provide insight of the physical world into a blockchain digital platform. We believe that the day will come whereby all lenders and borrowers would demand to have a secured real-time view of their cargo under financing on a secure and immutable blockchain platform like iTrust,” said chief executive and co-founder of iTrust LIm Chee Kean.
Leading global banks such as HSBC and their blockchain partners are increasingly experimenting with programs to digitize their otherwise paper-based and cumbersome processes related to trade finance. HSBC has also reportedly transacted its first digitized Letter of Credit on blockchain.