Several international bank consortia are testing the use of the blockchain to streamline and automate trade finance, which has traditionally relied heavily on manual and paper-based processes.
The banks say their pilots prove that distributed ledger technology (DLT) makes it easier to coordinate the participants involved in trade finance deals and to record each stage in a supply chain. Also, the use of smart contracts, or algorithms translating business terms from paper contracts to computer-readable codes, on a blockchain can help participants comply with contractual obligations such as staged payments for meeting specific conditions.
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