A. General Information
Mizuho-Marubeni Pilot on blockchain trade transactions
B. Lessons Learned
Mizuho Financial Group, Mizuho Bank, and Sompo Japan Nipponkoa Insurance completed a trade transaction between Australia and Japan using blockchain technology. The implementation demonstrated shorter delivery times for trade documents, reduced time for document creation and transmission, and enhanced transparency.
Reduce transaction time and cost and digitalization of trade transaction through blockchain
Trade transactions necessitate the communication of information such as country of origin or product details that varies from transaction to transaction between a large number of parties. The diversity of the information involved has hindered digitization until now, and still requires a significant volume of documentation, leading to high costs and administrative work throughout the world.
The recent project involved a trade transaction between Australia and Japan in which all trade-related processes, from issuing the letter of credit to delivering trade documents, were completed entirely via a digital platform using blockchain/DLT.
Blockchain is a form of distributed ledger technology (DLT). It utilizes a system of consensus formation among participants to enable transactions to take place even in the absence of a trusted central authority. Because it is easy to audit, has built-in protection against double entries, and is virtually impossible to falsify transactions, the technology has a number of potential applications in a wide range of fields across financial services including payments/settlements and securities; as well as other forms of asset transfer, such as land registration.
- It is not possible to transmit trade transaction information in digital blockchain/DLT format to parties who do not use the platform; transactions must be conducted as before - Enabling the transmission of the wide variety of information necessary for trade transactions will require standardizing the information for blockchain/DLT at an international level
- Shorter delivery time for trade documents (reduced time from multiple days to 2 hours) - Reduction of time required to create and transmit documents, as well as labor and other costs through document digitalization - Increased transparency by sharing transaction details with all parties
Building on this trade transaction project, Mizuho aims to further explore the practical business application of blockchain/DLT and to offer technologically sophisticated, client-focused services going forward.