- Swift is leading a project with BNY Mellon and Deutsche Bank for eBL interoperability on blockchain, improving commercial efficiency.
- The initiative aims to digitize freight invoices, reducing fraud and costs, supported by legislation for legal recognition.
Recently, BNY Mellon and Deutsche Bank took part in a Swift-led trial focused on the interoperability of electronic freight bills (eBLs). This trial, which is the second of its kind, focused on the ability to work together between various blockchain platforms tasked with managing eBLs.
EBLs are key documents in international trade, as they certify the ownership of goods during their movement. Today, most of these invoices are still issued on paper, a method that is not only inefficient, but also prone to fraud. The transition to a digital format for these invoices could lead to significant savings and stimulate the growth of trade worldwide.
Within the FIT Alliance initiative, which includes Swift and other trade associations, the use of eBL is being promoted. Numerous organizations, including major shipping lines, have committed to adopting eBL for a significant portion of their cargo.
A major challenge in this process is the lack of interoperability between the various current eBL solutions. This presents a challenge for banks and other supply chain participants, who would need multiple integrations to operate efficiently.
Swift proposes a solution that would allow banks to use their existing connections to Swift and a single API, facilitating the exchange of eBL between the various supply chain players.
Joon Kim of BNY Mellon highlighted the advantages of this infrastructure in reducing costs and time in document exchange. In previous trials, Swift included CargoX and edoxOnline, and in this latest trial WaveBL and TradeGo were added, in addition to the aforementioned banks.
How could XRP help in this system?
Ripple (XRP) could be a valuable tool in the electronic cargo bill (eBL) interoperability system for several reasons:
- Fast and Efficient Transactions: Ripple is known for its ability to facilitate fast, low-cost transactions. This would be crucial in the international trade environment, where efficiency and speed are paramount for the transfer of critical documents such as eBLs.
- Interoperability between Different Financial Systems: Ripple has proven to be effective in connecting different financial systems. This could help overcome one of the main challenges of the Swift project, which is the lack of interoperability between the various existing eBL solutions.
- Enhanced Security and Transparency: Using blockchain technology, Ripple can offer a higher level of security and transparency in transactions. This is critical in international trade to prevent fraud and ensure the authenticity of freight invoices.
- Integration with Banks: Given that financial institutions such as BNY Mellon and Deutsche Bank are involved, the use of Ripple, which already has a strong presence in the banking sector, could facilitate a smoother and more effective integration with existing banking systems.
- Reduced Transaction Costs and Times: Ripple can significantly reduce the costs and times associated with cross-border transactions. This would be beneficial to the global supply chain, streamlining the eBL issuance and transfer process.
Although Swift’s solution is not yet ready for commercial use, the organization is looking to work with the industry for its development and commercialization. In addition, Swift is investigating interoperability solutions for digital currencies issued by central banks and tangible asset tokenization platforms.
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