Microsoft and Bank of America collaborate on blockchain trade finance platform to reduce operational risks for finance departments

Bank of America (BoA) and Microsoft announced that they will jointly develop and test a blockchain-based trade finance ^[1] platform.

In this collaboration, Bank of America will establish direct contact with Microsoft's Treasury Department (which is responsible for managing various transactions generated by the company's financial activities and internal strategic investments and mergers and acquisitions), and the two will jointly create a blockchain system to enable transactions between enterprises.

(Microsoft CFO Amy Hood)

Microsoft Vice President and CFO Amy Hood said the partnership is intended to reduce risk in its treasury operations. She said:

Companies around the world, including Microsoft, are undergoing digital transformation. This transformation can help us grow, make us more competitive, and make business operations more flexible. Blockchain is an important potential factor in promoting this transformation.

Microsoft said it is currently testing the impact of a blockchain platform on the letter of credit (LC) process, and will present a prototype of the technology at the International Banking Symposium (Sibos) this week.

Recently, many large financial institutions have been interested in using blockchain to promote trade finance processes and supply chain management. One of the most eye-catching projects is led by the blockchain alliance R3.

This type of research usually requires the participation of many parties. Most companies today still rely on spreadsheets and a lot of paperwork. I believe this blockchain use case will be very useful and related companies will be able to benefit from it.

To learn more about blockchain and supply chain management applications, please click "Blockchain and Supply Chain Special Topic".

Notes (↵ returns to text)

1. Trade finance emerged with the development of trade. Its initial business was only to provide exchange and payment for the trade activities of traders in various countries. Later, it gradually expanded to trade-related financing, cash flow management, etc.