BBVA in blockchain first for international trade
Written by Anthony Strzalek
Spanish banking group BBVA has carried out what it claims is the first blockchain-based international trade transaction between Europe and Latin America.
Working in collaboration with tech firm Wave, BBVA conducted the first pilot that uses blockchain to automate the electronic submission of documents in an import-export transaction between the two continents.
Thanks to Wave’s solution, which uses distributed ledger technology and blockchain, BBVA was able to reduce the time required to send, verify and authorise an international trade transaction, which normally takes from seven to ten days, to just 2.5 hours.
The pilot was run on an actual sale transaction between Mexico and Spain, in which Frime, a company based in Barcelona, bought more than 25 tons of frozen tuna from Pinsa Congelados, of Maztlan, México.
The payment was made using a letter of credit – the most common payment system in international trade transactions. BBVA Spain issued the letter and BBVA Bancomer processed the payment.
The large volume of documentation required by a letter of credit entails a series of different processes that in most cases involve error-prone procedures such as manual checks and sending physical documents, which can make the process last up to two weeks.
Wave’s system made it possible to make changes or corrections that arose from the moment the goods were loaded until their arrival at the destination. The pilot also included the electronic signature of documents, the simultaneous distribution of copies to all parties and the reception of the ownership of the documentation at each step along the way.
Patxi Fernández de Trocóniz, head of global trade and international banking at BBVA, said: “The pilot we carried out with Wave represents a leap forward in improving the efficiency of international trade transactions. The time it takes to manage the documentation was reduced to a process that lasted just a few hours, in which all parties were constantly aware of the status of the documents.”