Standard Bank Group has enabled the much-enabled digitalization of cross-border trade processes, becoming the first African first node operator to do so.
The largest African bank by assets is partnering with enterprise-grade distributed public ledger Hedera Hashgraph to make the project possible.
Project to scale cross-border trade
According to the announcement, the project will solve some of the issues that have prevented the historical growth of cross-border trade.
Some of the bottlenecks in cross-border trade include information irregularity between parties involved as well as long settlement periods. Also, there is no or little transparency or visibility for all parties involved. The idea of the project is to put all these problems in the past.
It will allow for efficient sharing of information through the Hedera distributed ledger technology (DLT). The project will take away the need to have a trusted intermediary. It provides a transparent environment since transactions on the network will not be confirmed until the outlined conditions are met. This makes it possible for trades to be settled more efficiently and faster too.
More use cases for DLT
Mance Harmon, chief executive officer of Hedera, commented on the partnership. He stated that Africa will play a major role in DLT utilization.
He added that services like M-Pesa are already popular and widely utilized. It shows that African companies are ready and willing to step up in cross-border trade. They are also ripe to utilize distributed ledger technology to meet the changing needs of customers. He also said there is strong interest from firms in the region who want to utilize DLT in other sectors such as supply chains, energy management, and healthcare.
Ian Putter, head of blockchain at Standard Chartered Group, said the collaboration with Hedera is in line with the bank’s goal of using decentralized technology to improve cross-border payments in Africa.
Putter also said the bank is focused on connecting Africa to partners in China and other places for broader support of cross-border trades in the continent.
He also said the bank has concluded with some of the partners to exploit and scale up the cross-border trade solutions.
The bank also wants to explore more with the technology since it evolves rapidly. It wants to do this by leveraging existing solutions through more partnerships.
Putter also stated that the wider popularity of central bank digital currencies (CBDC) is one of the reasons why DLT-based technology will disrupt the global business process.