The Eastern and Southern African Trade and Development Bank (TDB) has said that it has executed the first intra-African trade finance transaction worth over $400 million dollars via blockchain.
The transaction involved OCP Group, a state-owned phosphate mining and fertilizer producer and an Ethiopian buyer via DLTLedgers, a Singapore-based fintech which operates on R3 Corda decentralized and consensus network.
According to the state-owned OCP Group, the use of blockchain for trade finance is all part of the parastatal’s digitization strategy that saw the trade take place in under 2 hours compared to over 3 weeks through the traditional banking system.
This is the second transaction by DTLLedgers in Africa with the first involving AgroCorp, a Singapore-based company, which used the blockchain to handle the importation of $22 million worth of sugar into Ethiopia from India – the first live end-to-end trade finance deal using blockchain technology for an African development finance institution.
Speaking about this monumental transaction, Admassu Tadesse, CEO and Managing Director, TDB, said:
“As part of our response to the pandemic, we have been providing liquidity to our clients to curtail cross-border trade and supply chains disruptions, and ultimately, to help our member states continue working towards their development objectives.
With transport logistics slowing down, blockchain has been instrumental in making this happen. We are thrilled to continue our partnership with dltledgers which will enable us to increase our volume of trade finance executed via blockchain during this difficult period, and beyond.”
– CEO, Trade Development Bank
According to the bank’s deputy CEO, TDB is looking to working with more financial institutions, traders, and suppliers across Africa and globally who ‘stand to significantly benefit from the digitisation of their trade finance activities.’