Robert Barnes is the co-founder and CEO of TradeIX and the co-founder of the Marco Polo network. TradeIX is the network operator that runs the Marco Polo network a consortium of banks and corporates that transact both domestically and globally. In this podcast Rob, takes us through how Marco Polo is able to drive trade and working capital innovation with blockchain technology.

 

What is blockchain?

Rob, looks at blockchain from a distributed ledger technology (DLT) standpoint because their interest is in peer to peer permissioned transactions.

Rob, explains how there are different types of blockchain from the broadcast model, also known as public blockchain, such as Bitcoin, to the peer to peer model like Corda. A blockchain that has financial transactions, needs a peer to peer network that is highly permissione where only the participants to the transaction have visibility over it.

For Rob, blockchain is a platform that facilitates the sharing of data between different legal entities that are permissioned to have visibility over a transaction.

TradeIX / Marco Polo also use the same technology to run stateless calls. A stateless call is where you’re using the communication protocols of blockchain to call something or to request something that doesn’t need to be written onto the blockchain. By doing this you avoid the use of APIs between the various legal entities, companies and customers. APIs are used to connect into large corporates’ back end systems, ERP systems or underwriting ones to name a few.

 

DLT breaking down silos in trade finance

When you look at the financing part of trade it is about interactions between corporate entities and their bank. This could be as simple as a payment. Whatever the interaction it happens via silos that need to talk to each other. Most of the time this communication happens via emails with PDFs, via API calls or sometimes it requires the entity to join a particular business network to get access to the data within a silo. If they do join a business network the power is usually centralised, owned by a third party and more importantly you get into issues of data residency.

Blockchain / DLT provides the opportunity for everybody to control and manage their own data within their desired jurisdiction and shared with the counterparties that they are doing business with globally. This enables the breaking down of silos as parties start to communicate and transact between each other across the DLT, whilst providing all the permissioned ones with access to this single version of the truth in an immutable manner.

Having access to this single version of the truth enables all parties to avoid the unnecessary cost of data reconciliation and verification. For Rob, blockchain / DLT at its core affords the ability to take risk and cost out of everyday processes that are done today.

 

TradeIX

TradeIX started out its journey by being super focused on the actual financial transaction within trade. As they started working with banks, insurers and corporates their journey evolved into solving problems of communication between businesses, financial institutions, and the various ecosystem participants. For example, it enables corporates to exchange purchase orders and invoices between themselves without having to go through a centralised business network, use paper, or email.

 

Marco Polo