Corporate investment banking company BNY Mellon, through its participation in the Marco Polo Network, has become part of a group working to introduce blockchain technology into international trade finance, according to a Tuesday (Oct. 5) press release. As part of the collaborative effort, BNY Mellon is looking to digitize how working capital is provided to both suppliers and buyers worldwide.
By partnering with the Ireland-based universal digital trade and payment solutions provider, BNY Mellon can more easily insert liquidity into the international supply chain and offer discounted finance solutions to suppliers shipping goods and services to their buyers around the globe, according to the announcement. The network, in an effort to accelerate the trade finance workflow, provides real-time insight into trade finance instruments, such as purchase orders and invoices.
Founded in 2016, the Marco Polo Network is a cloud-based blockchain-powered collective of roughly 45 banks that offers an open software platform for trade, payments and working capital financing to banks and corporate clients. The network allows for the simplified, secure and fast exchange of trade data assets in a multi-channel environment.
Using the blockchain, the instant that both parties agree to the transaction terms, the trade is confirmed in real time, enabling the faster delivery of working capital to fund the trade, according to the press release.
Similar to the BNY Mellon collaboration with the Marco Polo Network, in 2019 Bank of America joined the network to further its trade finance efforts, according to PYMNTS.
In terms of leveraging liquidity, BNY Mellon, in June, launched its cross-currency sweeps. The effort lets customers that have funds in different currency accounts concentrate their funds in their base currency. The tool is helpful when it comes to assisting customers minimize their exposure to foreign exchange volatility in addition to negative interest rate-bearing currencies, according to PYMNTS.