More Banks Join IBM’s Blockchain Trade-Finance Project

While International Business Machines (NYSE:IBM) is not typically viewed as a tech company at the bleeding edge, blockchain is one area where Big Blue is leading the way. A recent survey of company founders, executives, managers, and IT leaders pegged IBM as the overwhelming leader, a result that bodes well for IBM’s nascent blockchain business.

IBM’s blockchain efforts received another boost on Wednesday, when the company announced that four additional banks were joining its ongoing initiative, started in 2016 along with UBS, to build a global blockchain-based trade finance platform. This appears separate from a project announced earlier this year to build a trade-finance platform for a consortium of seven major European banks. Both projects aim to lower costs and slash inefficiency in trade transactions, an application that seems well suited for blockchain.

Jumping on the Batavia bandwagon

Bank of Montreal, CaixaBank, Commerzbank, and Erste Group are joining IBM and UBS, collaborating to bring the blockchain-based trade finance platform, called Batavia, to life. The idea behind the platform is to simplify a process that is typically anything but simple. IBM described the current inefficient trade transaction process in the press release announcing the news:

Traditionally, trading partners, including buyers, sellers, their banks, transporters, inspectors and regulators have relied on large volumes of paper based documentation to securely conduct trade transactions. This process can take up to weeks, incurring costs, making data vulnerable to errors due to repeated manual reprocessing and tying up capital. Delays and lack of transparency in trade can make it difficult for companies to access financing, limiting their ability to trade across borders and grow revenues.

Batavia allows for the elimination of this mountain of paperwork. Blockchain, which is essentially a distributed ledger of transactions, gives each party a full view of the process. User input and sensor data will update the status of the transaction as the shipment is makes its way to its destination. Batavia will release payments along the way as steps in the process are completed.

IBM summed up the promise of the platform: “When all participants in a transaction can access a shared version of the truth, they can interact with greater trust, building larger and more distributed networks, and in turn, growing revenue.”

IBM plans to begin pilot transactions in early 2018 to test the Batavia platform. It will run on IBM’s Blockchain Platform, which also hosts other IBM blockchain initiatives.

A long-term bet on a new technology

Blockchain is a young technology, but it has the potential to make a wide variety of processes more efficient. There’s a lot of hype around blockchain, particularly because it’s the technology that underlies cryptocurrencies like Bitcoin. Blockchain may end up being a revolutionary technology — or not. It’s just too early to tell.

Either way, IBM is making blockchain a key component of its transformation. The company is working on other major blockchain projects, including a deal with major food companies aimed at using blockchain to improve the global food supply chain by tracking down the source of contaminated food quickly. In total, IBM has worked with more than 400 clients designing and building blockchain-based solutions.

It may be years before IBM’s blockchain business begins generating a meaningful amount of revenue, and it may never happen if these major projects don’t produce results. But if blockchain lives up to even a fraction of the hype, IBM will be at the center of a major technological shift.

Timothy Green owns shares of IBM. The Motley Fool has no position in any of the stocks mentioned.


Finance park unveiled in Henrico aims to help area students improve their budget skills

The red ribbon in the plaza of the new Junior Achievement Finance Park is practically the only sign of the color associated with negative in the world of finance. Green — the color associated with positive — is everywhere. With a few scissors and about 20 elected officials, the red ribbon was soon in pieces.

About 200 local businesspeople, school and municipal officials, and members of the community were on hand Thursday to watch the ribbon-cutting that officially opened the new finance park in Henrico County, a multimillion-dollar project that brought together nine school divisions. The goal of the park is to improve the financial literacy of students in central Virginia through what is essentially an amusement park for introductory finance.

The park is located on the third floor of the Libbie Mill Library, which opened in 2015 at 2100 Libbie Lake East St. The project fits right into the modern library with high-tech exhibits and a career center set to open in December.

Although the finance park is in Henrico, speakers at Thursday’s unveiling stressed that the facility will benefit students throughout the region.

“Many of the decisions we make in life are long-term, and that’s what this program is about,” said Henrico County Manager John Vithoulkas.

The area school divisions involved signed memorandums of understanding with Junior Achievement of Central Virginia, a nonprofit aimed at helping students prepare for the future, so that high school students will take a field trip to the finance park after completing 13 finance sessions in their home classrooms.

Then the fun begins.

For the field trip, students will be randomly assigned a credit score. They must then navigate the room, making stops to research and allot money for their budget. Volunteers help the students at each stop, most of which are sponsored by local companies. Dominion Energy, for example, sponsors the stop where students must budget their energy bill.

“When those proverbial light bulbs begin, that’s when you know you’re building a strong future,” said Daphne Swanson, the president and CEO of Junior Achievement of Central Virginia.

The trip gave Jasmine Medrano, a junior at Glen Allen High School, a taste of reality.

“Having to go through a virtual persona to visit a taste of the real world was not only entertaining for me, but more so a reality,” said Medrano, the nonprofit’s student ambassador.

The day was extra special for Medrano, who was surprised with a $2,500 scholarship. She had originally envisioned being a nurse practitioner, she said, but is now considering going to school to be an accountant.

An estimated 9,000 students are expected to attend the park this year. The first round of students taking the field trip is expected in the first week of November.

The high-tech facility, geared with about 130 iPads and touch screens, was originally in a mobile unit on Broad Street. Junior Achievement’s board took on a $4 million fundraising campaign to improve the park, and through Thursday, had raised about $3.6 million.

“We needed to build a facility that could actually accommodate (the students), and this was that facility,” said Swanson, the CEO.

Aaron Montgomery, a board member for the nonprofit, was still in awe Thursday as he looked around at what was built.

“This has always been the vision. Now we have it,” he said. “It brought everything and everyone together.”

Source -richmond