SWIAT and Olea Forge Groundbreaking Partnership
In a significant move for the blockchain landscape, SWIAT, a software developer based in Frankfurt, has announced a collaboration with Olea, a company that provides digital financial market infrastructure in Singapore. This partnership aims to revolutionize trade finance by leveraging blockchain technology to streamline processes and enhance transparency.
Tokenizing Receivables for Enhanced Financing
In preparation for financing, Olea took an innovative step by tokenizing receivables that arise from supplier deliveries of goods. The backbone for this technological endeavor was provided by SWIAT’s robust blockchain infrastructure, which is adept at fulfilling stringent regulatory standards, including those set by Basel III. Olea’s platform effectively matched these tokenized receivables with appropriate funders, ensuring a seamless financing process.
DekaBank: The Pioneer Funder
As part of this initiative, DekaBank, a joint-venture partner of SWIAT, stepped in as the inaugural funder for the tokenized receivable. This collaboration not only showcased the potential of SWIAT’s tokenization engine but also highlighted Olea’s expertise in the realm of trade receivables financing. This marked a noteworthy advancement in utilizing blockchain technology for optimizing financial transactions and reducing inefficiencies.
Exploring the Vast Potential of Trade Finance
The trade finance market represents an enormous potential for innovation, with its value pegged at $9.3 trillion in 2022, projected to grow to $12.5 trillion by 2032, reflecting a compound annual growth rate (CAGR) of around 3%. Supply chain finance solutions, including those utilizing blockchain, allow businesses to enhance their working capital. By extending payment terms while ensuring prompt supplier payments, companies can achieve better financial stability.
Traditional trade finance has its drawbacks, including lengthy processing times and complicated documentation, along with heightened risks of fraud and errors. The collaboration between SWIAT and Olea aims to address these issues, creating a more efficient and transparent trade finance ecosystem that benefits businesses globally. Both organizations are also empowered by SC Ventures, the innovation arm of Standard Chartered, which will support their expansion efforts in both Singapore and Germany.
Blockchain-Driven Digital Securities Advancements
SWIAT envisions a future where digital assets play a crucial role in the global financial landscape as the tokenization of assets continues to gain momentum. The company forecasts that the European decentralized financial market will experience explosive growth, potentially exceeding 60% annually and surpassing €3 trillion (approximately $3.34 trillion) by 2030.
Recently, SWIAT’s private blockchain has facilitated several digital bond issuances. Notably, on September 13, Siemens successfully issued €100,000 worth of crypto securities under Germany’s Electronic Securities Act (eWpG). Remarkably, these securities were redeemed just three days later, with all payments processed on the Onyx network using JP Morgan’s JPM Coin. The asset transfers were settled through SWIAT’s innovative delivery-versus-payment (DvP) mechanism, completing the entire transaction within a mere 93 seconds.
Recent Successes and Future Prospects
DekaBank also played a pivotal role in this transaction, serving as the regulated crypto securities registrar on the SWIAT network. Additionally, earlier this month, Siemens made headlines again by issuing a €300 million digital bond (approx. $334 million) on the SWIAT blockchain. This issuance was uniquely settled using conventional central bank money through Germany’s Trigger solution, which streamlines central bank payments through the TARGET 2 system. It also formed part of the European Central Bank’s trials focused on wholesale distributed ledger technology (DLT) settlements.
The partnership between SWIAT and Olea, alongside their ongoing innovations, signifies a transformative step towards modernizing the trade finance industry, promising enhanced efficiency, security, and transparency for stakeholders in this burgeoning market.