Citigroup Launches Blockchain Bill of Lading for Trade Finance

Trading blockchain platform TradeLens, with the support of the banking corporation Citigroup (Citi), conducted the first paperless trade transaction.

Containers of products from India were imported into Bangladesh based on the submission of an electronic bill of lading (eBL), which was then used to validate the letter of credit to Citi.

“Previously, to complete a trade transaction, the parties were required to provide supporting documentation on paper. This made transactions time-consuming and error-prone. The implementation of innovative blockchain technologies brings significant benefits to all participants: our clients and Citi as their banking partner,” said Moinul Huq, head of treasury and trading operations for Citi in Bangladesh.

A Citi spokesperson said that as a shipment moves from source to destination through the supply chain, all information is captured on the TradeLens eBL blockchain platform. These are the data of the parties involved in the transportation of the cargo, the stages of logistics and information about the movement, accompanying documents, including eBL, invoice, packing list and certificate of origin.

Hook said the use of blockchain technology to validate the eBL bill of lading has reduced transaction time by ten days, as well as paperwork, postage and container storage fees (demurrage). Digital verification of accompanying documents significantly reduces the risk of counterfeit bills of lading, say the creators of the project.

In 2020, Japan’s third-largest bank, Sumitomo Mitsui Banking Corporation (SMBC), announced the launch of an electronic data collection and matching service, as well as plans to begin commercial operation of the Marco Polo blockchain platform for trade finance transactions.