Conclusion of Trade Transaction Using Blockchain
On July 6, 2017, Mizuho Financial Group, Inc. (President & CEO: Yasuhiro Sato), Mizuho Bank, Ltd. (President & CEO: Koji Fujiwara), Marubeni Corporation (President & CEO: Fumiya Kokubu), and Sompo Japan Nipponkoa Insurance Inc. (President: Keiji Nishizawa) completed a trade transaction between Australia and Japan using blockchain/distributed ledger technology (DLT).
Trade transactions necessitate the communication of information such as country of origin or product details that varies from transaction to transaction between a large number of parties. The diversity of the information involved has hindered digitization until now, and still requires a significant volume of documentation, leading to high costs and administrative work throughout the world. The recent project involved a trade transaction between Australia and Japan in which all trade-related processes, from issuing the letter of credit to delivering trade documents, were completed entirely via a digital platform using blockchain/DLT. As a result of the project, Mizuho and the other involved parties were able to make the following conclusions regarding the use of blockchain/DLT in trade transactions.
Benefits:
- Shorter delivery time for trade documents – Reduced from multiple days (typical length) to 2 hours
- Reduction of time required to create and transmit documents, as well as labor and other costs through document digitization
- Increased transparency by sharing transaction details with all parties
Issues:
- It is not possible to transmit trade transaction information in digital blockchain/DLT format to parties who do not use the platform; transactions must be conducted as before
- Enabling the transmission of the wide variety of information necessary for trade transactions will require standardizing the information for blockchain/DLT at an international level
