According to Coindesk, CEO of FedEx Fred Smith stated that “Blockchain has the potential to completely revolutionize what’s across the border,” at CoinDesk’s Consensus 2018 in New York.
Smith stated that an issue in the logistics and transportation industry is the “massive amount of friction” as a result of wildly different standards, regulations, and terminologies in different countries.
He also said:
“For cross-border shipments, ‘trust’ is legal requirement for every transaction. What blockchain has is a potential for the first time ever to make the information available for everybody.”
FedEx’s CIO and executive vice president of information services said that FedEx will explore the use of blockchain in the freight industry. He said:
“We move easily 12 million shipments a day and that more than doubles during the peak seasons. While we absolutely believe this technology is going to scale, right now it makes sense for us to do this in our freight world…The application of these custody chains … is so critical to the information aspect. We’re operating on this plane between the physical world and the digital world.”
On FedEx embracing blockchain technology, Smith concluded:
“If you are not operating at the edge of new technologies, you will surely be disrupted. If you are not willing to embrace new technologies like internet of things and blockchain to face those new threats, you are, maybe subtly, at some point … going to extinction.”
Deloitte’s Head Of Blockchain Leaves To Build Ethereum-based Supply Chain
According to Forbes, Eric Piscini helped Deloitte’s global blockchain practice into a $50 million operation and grew the account firm’s blockchain team from three people in 2012 to 1,200 people today. Now, Piscini has decided to leave Deloitte to work on startup Citizens Reserve which is attempting to raise $300 million to move the world’s fragmented supply chain networks to a blockchain.
In an effort to comply with regulations, Citizens Reserve’s $300 million fundraising effort is being broken up into three separate parts that could be considered a mix between a traditional fundraising round, an Initial Public Offering (IPO) and an ICO. The first part is a $2.3 million friends and family round in the form of convertible notes, and the rest consists of selling tokens.
Piscini says Citizens Reserve is working with three companies who are currently providing the defense industry supply chain software that are looking to “tokenize their platform”.
“We have decided to start with the defense industry because we have relationships with key participants in the defense industry, and it’s a very broken supply chain across the globe…we have market participants from that industry that are being onboarded into the consortium now.”
HSBC Performed The World’s First Commercially Viable Trade Finance Transaction Using Blockchain
According to CNBC, HSBC claims that it had performed the world’s first commercially viable trade finance transaction using blockchain technology. The trade finance transaction involved a bulk shipment of soybeans from Argentina to Malaysia. A letter of credit was issued from HSBC to Dutch lender ING.
A Letter of credit is issued by one bank to another to guarantee that a payment will be received by a seller under a set of conditions. Traditionally this process would take a considerable amount of time and paperwork between the parties involved. One potential that blockchain technology has is that it can cut down on time and costs for issuing letters of credit.
Vivek Ramachandran, head of growth and innovation at HSBC, said of the transaction:
“The need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous…the quick turnaround could mean unlocking liquidity for businesses.”
HSBC and ING said the transaction took 24 hours, as opposed to 5–10 days transactions like these normally take.
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