EXCLUSIVE – Twelve major banks joined blockchain consortium firm R3 and trade finance technology provider TradeIX on Tuesday in an initiative to develop an open account trade finance business network.

The overall goal is to design a new infrastructure behind open account trade finance, and provide the appropriate tools for buyers and sellers. These tools range from trade specific APIs, technology, a sophisticated rules engine, as well as an open – standard core infrastructure for trade data, contracts, and transactions.

The network will be powered by TradeIX and R3’s Corda distributed ledger platform.

The twelve banks involved in the initiate are Bangkok Bank, Barclays, BBVA, Bladex, BNP Paribas, Commerzbank, CTBC Bank, ING, Intesa Sanpaolo, Shinhan Bank, Royal Bank of Scotland and Wells Fargo.

In a Tuesday statement, Global Head of the Trade Competence Center at BNP Paribas, Marguerite Burghardt said:

We see this initiative as complementary with other initiatives and trade platforms. Building smart contracts to capture the SCF business logic on DLT is an essential step that will significantly boost the trade finance ecosystem. This consortium with R3 provides an excellent opportunity to work on this collaboratively.

From this collaboration, banks and other financial institutions will be able to automate pre- and post-shipment financing and risk mitigation for corporate buyers and sellers around the world.

While these buyers and sellers will be able to access flexible API-driven technology solutions that simplify trade, improve visibility into trade flows, and provide access to credit and risk mitigation services at throughout specific points in the trade lifecycle.

The project’s first phase, which is where it is currently, aims to create a standard trade finance smart contracts on a distributed ledger infrastructure.

The next phase of the project will be expanding services and onboarding additional members.

R3 also said that the International Trade and Forfaiting Association (ITFA), which joined the R3 network, will be involved in the project. ITFA is an international association for the trade receivables and supply chain finance industry with over 170 members.

Based in New York, R3 works with over 80 banks and other financial institutions to develop, its distributed ledger platform Corda. With offices across 9 countries, it recently completed two of the three tranches in a Series A fundraise valued at $107 million.

Based in the U.K., TradeIX is an open platform providing applications, technology tools, and core infrastructure for the trade finance ecosystem.