Banks Take Sides as Blockchain Trade Finance Race Heats Up

Trade finance is possibly the busiest space in enterprise blockchain today.

Announced today, NatWest, a part of the Royal Bank of Scotland, has joined Marco Polo, the consortium started by enterprise blockchain startup R3 and trade finance specialist TradeIX. The addition of the U.K.'s third largest bank brings the total number of institutions in Marco Polo to 10 and follows a $16 million funding round for the consortium.

The news also comes on the heels of the recent announcement that We.Trade, a rival trade finance blockchain platform built on Hyperledger Fabric with nine banks on board, has gone live.

Notably, We.Trade is a private legal entity, which has picked off a particular market segment - trade finance for small- and mid-size enterprises in Europe.

The argument for Marco Polo's approach to trade finance on the blockchain is that while development may take a bit longer, ensuring that the new systems can talk to each other is necessary if this technology is to fulfill its promise of removing friction from global trade.

Oliver Belin, CMO at TradeIX, said that banks today must try to avoid a situation where they work with other fintech players and platforms, as well as having an application developed in-house, and while also trying to work with other banks.

"I think many people are quite surprised that all these blockchain trade finance platforms cannot communicate between each other," said Belin.

"We are a legal entity and we are able to license solutions to banks and that's the main difference. We can license today and are not asking for banks to help us to build something."

The standalone nature of trade finance deployments on Hyperledger, in the form of we.

Not all trade finance banks see things the way NatWest does.