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Standard Chartered Pilots Blockchain-Based Trade Guarantees

You’ve heard of smart contracts–but what about smart guarantees? That’s what London-based banking giant Standard Chartered is setting out to do: leverage the blockchain to alter the traditionally paper-intensive process of trade finance guarantees.

The bank has partnered with the financing arm of Siemens and digital trade provider TradeIX to fully digitize trade finance, from the initiation of the guarantee to the handling of the claim. For its part, Siemens will digitize its entire guarantee process.

Michael Bueker, chief financial officer at Siemens called this move toward digitalization “an important step.” He added, “Especially at Siemens, as a digitalisation pioneer, this move is part of our strategic mission of going digital in all arenas. This will streamline our processes and make our trade finance operations smoother, faster, and more efficient.”

The project, which leverages the Corda Distributed Ledger and runs on the TradeIX application layer, launched in March. The group anticipates it will be fully completed by the end of this year. According to GTR, the bulk of the project will take place in the UAE, primarily with government entities.

Standard Chartered demonstrated at FinovateFall 2010. Earlier this year, the bank announced plans to apply for a virtual banking license in Hong Kong. Standard Chartered employs more than 86,000 people across 125 countries and has been in business for more than 150 years.