A groundbreaking trade has crossed in the commodity metals markets. This week, Skuchain, which has developed a currency agnostic blockchain to facilitate global trade across metals and mining, agriculture, electronics, automobiles and finance, announced that around $43 million in metal commodities purchased from one of Peru‘s largest mines at the behest of Japanese corporation Mitsubishi‘s U.S. subsidiary transacted in several blocks on Skuchain’s blockchain used for payment through Japan’s Mizuho Bank.
The buyer issued a digital asset in the form of a Distributed Ledger Payment Commitment (DLPC) published by the Bankers Association for Finance and Trade (BAFT), the world’s largest trade association for transaction banking.
Skuchain’s blockchain managed the lifecycle of the digital asset from issuance to discharge and triggered secure payment instructions to Mizuho, providing a similar level of security as Letters of Credit, Guarantees and other traditional trade instruments, at lower cost.
In a statement provided by Skuchain, Mitsubishi is said to have appreciated the “precise control” afforded over its counterparty payments and that it will seek to expand the use of blockchain-managed DLPCs to underwrite its own transactions, and encourage its own customers to replace current trade finance instruments with the DLPC.
“People have talked about blockchain and supply chain for at least 5 years. We just moved past the talk stage to actually move thousands of tons of a physical commodity across 10,000 miles backed by bank-acceptable digital assets worth $43 million on our blockchain and we did it faster, cheaper, and more secure than what came before,” said Skuchain Founder and CEO Srinivasan Sriram.
“We are very honored to collaborate with Skuchain and Mizuho Bank to conduct the first DLPC transactions in real trading. We would like to continuously pursue further opportunities to apply DLPC to provide better services to our customers and partners,” said Yuichiro Yoshinari, Director, Innovation and Design Thinking at the Silicon Valley Branch of Mitsubishi Corporation (Americas), Mitsubishi’s own innovation hub for testing new technologies, which led the project.
“We are honored to have conducted the first DLPC transactions with Mitsubishi Corporation (Americas) and Skuchain. We would like to accelerate the improvements in our ability to provide services to meet customers’ diverse needs by utilizing cutting-edge technologies in trade finance,” said Yoshisuke Maeda, General Manager at Mizuho Bank’s Global Transaction Banking Department.
“Digitization of trade requires standards as well as supporting legal framework. We were delighted to work with our members to develop the DLPC for this purpose, and even more excited that this has been successfully put into practice to facilitate live transactions,” said BAFT President & CEO Tod Burwell.
