Barclays and startup company, Wave, have become the first organisations to execute a global trade transaction using blockchain technology.

The letter of credit transaction between Ornua (formerly the Irish Dairy Board) and Seychelles Trading Company is the first to have trade documentation handled on the new Wave platform, with funds sent via SWIFT.

The new blockchain based system developed by Wave uses distributed ledger technology to ensure that all parties can see, transfer title and transmit shipping documents and other original trade documentation through a secure decentralised network, eliminating many of the current inefficiencies in international trade.

The new system could therefore speed up trade transactions, reduce costs for companies around the world and reduce the risk of documentary fraud.

Baihas Baghdadi, global head of trade and working capital at Barclays, said: “One of the biggest headaches in global trade currently is the vast movement of paper required to facilitate transactions, with multiple organisations in the chain.

“That is why we’ve been very keen to partner with Wave in using blockchain technology to save time and money for our clients, and potentially transform trade finance for businesses around the world.”

Wave was one of 11companies to have gone through the Barclays Accelerator programme in New York last summer. Since then it has been working with Barclays’ Trade and Blockchain team in the UK and South Africa to explore the various use cases of its innovative technology.

Barclays is also seeking to involve other banks in supporting adoption of Wave’s system, with the hope that this can develop into an industry wide improvement in how trade documentation is managed.

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