Blockchain
BNY Mellon Utilizes Blockchain to Digitize Working Capital in Global Trade Finance
BNY Mellon has joined a consortium working to introduce blockchain technology into international trade finance and digitize how working capital is provided to both suppliers and buyers across the globe.
Through its participation in the Marco Polo Network, BNY Mellon is now able to more efficiently insert liquidity into the international supply chain, providing supply chain finance solutions including both payables financing and receivables discounting to suppliers shipping goods and services to their buyers around the world.
The Marco Polo Network is a consortium of approximately 45 banks that provides an open software platform for trade, payments and working capital financing to banks, corporates and other market participants. It is a cloud-based blockchain-powered network that allows the seamless, secure and fast exchange of trade data assets in a multi-channel environment.
Utilizing Marco Polo, BNY Mellon will not only provide financing to suppliers, but will also have real-time visibility into trade finance instruments and their status, such as purchase orders and invoices.
Real-time visibility significantly speeds up the trade finance workflow. On the blockchain, the moment that both parties agree that the transaction terms are correct the trade is confirmed in real time. This means the data in trade documents are checked, matched and confirmed by both parties near instantaneously, enabling the faster delivery of working capital to finance the trade by liquidity providers like BNY Mellon.
Digitization delivers particularly pronounced efficiencies for large buyers such as big box retailers that may issue tens of thousands of purchase orders each day and that previously had to rely on an antiquated paper and email-based workflow to secure trade financing.
“Blockchain has the potential to transform the trade finance industry by replacing multiple systems with a single shared record through one distributed ledger. As all participants in the transaction will be immediately updated of each development in the trade lifecycle, this enables us to extend working capital more quickly and more securely to clients,” says Joon Kim, Global Head of Trade Finance Product & Portfolio Management in BNY Mellon Treasury Services.
Utilization of the blockchain reduces the risk that the same trade instruments could be used to secure working capital from multiple liquidity providers. This reduced credit risk increases confidence and the creditworthiness of clients and may translate into a better rate to obtain working capital.
Digitization and the multi-channel Marco Polo network also opens up the potential for the development of a liquid secondary market in trade finance, in which a trade instrument that is already subject to financing can be sold to an alternative liquidity provider consortium member, freeing up more capacity for additional working capital to be extended.
Finally, the blockchain enables counterparties to more seamlessly monitor whether trades align with their environmental, social and governance (ESG) principles. The Marco Polo network provides users with an independent view into a large number of corporations and applies an ESG score to each company that can enable participants to determine whether a company meets their environmental, social and governance values.
This includes the ability to track the labor conditions for workers within the supply chain, identify whether raw materials were obtained from prohibited areas such as conflict zones and monitor the carbon emissions of vehicles being used to ship orders.
Since the Marco Polo Network operates as an open platform that allows for connections through APIs, the network can accommodate a wide variety of Enterprise Resource Planning (ERP) systems that suppliers and buyers across the world may be utilizing as part of their trade financing process.
“We are particularly pleased to be a participant in the Marco Polo Network which will enable clients to interact with us and access financing in an open architecture compatible with most major ERP systems,” adds Kim.
Blockchain-based trade finance is just the latest step in BNY Mellon’s drive to expedite the paper-to-digital journey and make payments and trade more efficient for clients. Last month the firm announced that Verizon has become the first client to rollout Real-Time E-Bills and Payments to customers, making it the first US corporate to extend this innovative new technology into the retail consumer space.
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Blocks & Headlines: Today in Blockchain (BlackRock, Plume, SEALSQ, Hedera, Deutsche Bank, KuCoin)
Blockchain technology continues to drive innovation across industries, reshaping finance, infrastructure, and philanthropy. Today’s news roundup explores exciting developments in blockchain ETFs, tokenization funding, quantum-resistant chips, public blockchain initiatives, and impactful social projects. Here’s a deep dive into the latest blockchain headlines:
BlackRock ETF Embraces Blockchain with First Muni Bond Purchase
BlackRock’s blockchain-focused ETF has made its first foray into municipal bonds, signaling increased confidence in integrating blockchain technology with traditional finance. The ETF’s strategic investment demonstrates how blockchain can enhance transparency and efficiency in bond markets.
By tokenizing municipal bonds, BlackRock aims to simplify trading and settlement processes while reducing associated costs. This development underscores the growing role of blockchain in transforming financial instruments and fostering greater market accessibility.
Source: Yahoo Finance
Plume Secures Funding for Tokenization Platform
Blockchain fintech company Plume has raised significant funding to advance its tokenization platform. The company’s innovative approach enables businesses to convert real-world assets into digital tokens, streamlining asset management and unlocking liquidity.
Tokenization is rapidly gaining traction as a game-changer in sectors such as real estate, art, and commodities. Plume’s success reflects a broader trend of investment in blockchain solutions that bridge the gap between traditional assets and decentralized technologies.
Source: Fortune
SEALSQ and Hedera Partner for Quantum-Resistant Blockchain Chips
SEALSQ and Hedera have announced a groundbreaking collaboration to develop quantum-resistant chips designed to secure blockchain infrastructure. These advanced chips will provide robust protection against future quantum computing threats, ensuring the integrity of blockchain networks.
As quantum computing capabilities evolve, safeguarding blockchain ecosystems becomes increasingly critical. This partnership highlights the importance of proactive measures in maintaining the resilience and trustworthiness of decentralized systems.
Source: The Quantum Insider
Deutsche Bank’s Public, Permissioned Blockchain Initiative
Deutsche Bank’s Layer 2 blockchain solution is set to go public and operate as a permissioned network, according to its tech partner. This initiative aims to strike a balance between accessibility and security, leveraging blockchain to streamline financial services and enhance operational efficiency.
The decision to adopt a public, permissioned model reflects a growing trend among enterprises seeking to harness the benefits of decentralization while maintaining control over sensitive data. Deutsche Bank’s approach could serve as a blueprint for other financial institutions exploring blockchain adoption.
Source: CoinDesk
KuCoin’s “Light Up Africa” Initiative Brings Hope to Thousands
Cryptocurrency exchange KuCoin has made a significant impact through its “Light Up Africa” donation ceremony in Ghana, benefiting 36,000 children across the continent. The initiative combines blockchain technology with philanthropy to address energy poverty and support education.
By leveraging blockchain for transparency in charitable contributions, KuCoin sets an example of how the crypto industry can drive meaningful social change. The project demonstrates the potential of blockchain to empower communities and foster sustainable development.
Source: PR Newswire
Industry Implications and Key Takeaways
Today’s developments highlight the transformative potential of blockchain across multiple domains:
- Integration with Traditional Finance: BlackRock’s ETF underscores the synergy between blockchain and established financial systems.
- Tokenization Trends: Plume’s funding success reflects the growing demand for digital asset solutions.
- Quantum-Resistant Technologies: SEALSQ and Hedera’s partnership addresses emerging cybersecurity challenges.
- Enterprise Blockchain Adoption: Deutsche Bank’s public, permissioned network showcases the adaptability of blockchain in financial services.
- Social Impact: KuCoin’s philanthropic efforts illustrate blockchain’s capacity to drive positive societal outcomes.
The post Blocks & Headlines: Today in Blockchain (BlackRock, Plume, SEALSQ, Hedera, Deutsche Bank, KuCoin) appeared first on News, Events, Advertising Options.
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