SAN FRANCISCO–Wells Fargo and Commonwealth Bank of Australia have used blockchain to process and execute a shipment of cotton from the U.S. to China.
It’s a move that could provide a big breakthrough for the future of international trade, according to CNBC.
Blockchain, primarily known as the technology underpinning of digital currencies such as bitcoin, works like a huge, decentralized ledger for the digital currency bitcoin, recording every transaction and storing this information on a global network so it cannot be tampered with. Credit unions, including a large effort with which CUNA is involved, are exploring blockchain technologies of their own as they seek to cut costs and create a fraud-proof record of transactions without the need for third-party authorization.
Australia's Brighann Cotton Marketing bought the shipment, which was going from Texas to Qingdao, China, according to CNBC.
“Typically this process would require large amounts of paperwork, back-and-forth communication between all parties via email or fax, and the need to ensure everybody's records are up-to-date and the same,” the report noted.
"Existing trade finance processes are ripe for disruption and this proof of concept demonstrates how companies around the world could benefit from these emerging technologies," Michael Eidel, executive general manager of CBA's cash-flow and transaction services, said in a press release that was quoted by CNBC’s report.