SC Ventures’ Fintechs Team Up to Streamline Global Trade Finance

SWIAT, a Frankfurt-based blockchain software developer, recently announced a partnership with Olea, the digital financial market infrastructure in Singapore.

In preparation for financing, Olea tokenized receivables arising from a supplier’s delivery of goods. With its blockchain infrastructure designed to meet stringent regulatory requirements like the incoming Basel III, SWIAT provided the technological backbone for this approach. Olea’s platform then matched the tokenized receivables with a suitable funder.

DekaBank, a joint-venture partner in SWIAT, was the inaugural funder for the tokenized receivable. The project leveraged SWIAT’s tokenization engine and Olea’s expertise in trade receivables financing.

Trillions in Trade Finance: Untapped Potential for Blockchain

The global trade finance market was valued at $9.3 trillion in 2022 and is expected to reach $12.5 trillion by 2032, growing at a CAGR of 3%, according to the Trade Finance Market report.

The Trade Finance Market was valued at USD 9.3 trillion in 2022 and is estimated to register a CAGR of over 3% between 2023 and 2032.
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Supply chain finance solutions offer companies a way to optimize working capital by extending payment terms to suppliers while ensuring timely payments. Trade finance is considered a particularly safe form of finance due to its predictable collateral and documented operational flows.

By leveraging blockchain, SWIAT and Olea seek to address the challenges of traditional trade finance, such as slow processing times, complex documentation, high costs, and risk of fraud and errors, and create a more efficient and transparent ecosystem for businesses worldwide.

Both companies are backed by SC Ventures, Standard Chartered’s innovation arm, and this collaboration will also allow them to expand their reach in Singapore and Germany.

Blockchain-Powered Digital Securities

SWIAT predicts that digital assets will become increasingly important globally as asset tokenization expands. The company estimates that the European decentralized financial market will experience significant growth, exceeding 60% per year to reach over €3 trillion ($3.34 trillion) by 2030.

SWIAT’s private blockchain has been responsible for numerous digital bond issuances in recent months.

On Sept. 13, Siemens successfully issued €100,000 worth of crypto securities (around $111.3k) under Germany’s Electronic Securities Act (eWpG). Just three days later, the securities were redeemed.

Payments were processed on the Onyx network using JP Morgan’s JPM Coin, while asset transfers were settled on SWIAT’s delivery-versus-payment (DvP) mechanism. The entire transaction, from the parties’ confirmation of the trade on SWIAT to the final confirmation of settlement, was completed in just 93 seconds.

DekaBank, acting as a regulated crypto securities registrar on the SWIAT network, also participated in the process.

Earlier this month, Siemens also issued a €300 million digital bond ($334 million) on the SWIAT blockchain, which was settled with conventional central bank money using Germany’s Trigger solution, which automates central bank payments through the TARGET 2 system.

The issuance was part of the European Central Bank’s (ECB) trials on wholesale distributed ledger technology (DLT) settlement.