Israeli start-up company Wave offers a method to transmit shipping documents using innovative blockchain technology, known as the basis for the Bitcoin virtual money, thus eliminating the centuries-old practice of sending a paper bill of lading.
Because shipped goods can’t be released until the bill of lading — which is usually sent separately — arrives, the company is sure that the creation of a fast, secure way to send it digitally could have a big impact on the shipping business, writes JOC.
Wave follows the UK’s Bolero and essDocs, each of which provide digital bill of lading services that have not gained much traction in the market. Both use a centralized service provider, similar to online payment facilitator PayPal, to manage the “ledger” of bill transfers, said Wave CEO Gadi Ruschin.
Wave’s technology doesn’t require a centralized server. On the contrary, Wave has created a peer-to-peer and completely decentralized network that connects all carriers, banks, forwarders, traders and other parties of the international trading supply chain. Distributed ledger technology ensures that all parties can see, transfer title and transmit shipping documents and other original trade documentation in an encrypted form eliminating disputes, forgeries and unnecessary risks.
The company’s website says that using decentralized technologies, all communication between the parties involved will be direct and will not pass through a specific central entity. Due to its decentralized nature, the Wave network will not have any single point of failure and will not rely on any single entity.
The company hopes to put its technology on the market in the first quarter of next year.
In September, 2016 Barklays Bank and Wave successfully tested the system. As it was stated in the bank’s official press release, the letter of credit transaction between Ornua (formerly the Irish Dairy Board) and Seychelles Trading Company was the first to have trade documentation handled on the new Wave platform, with funds sent via Swift. ‘The new system could therefore speed up trade transactions, reduce costs for companies around the world and reduce the risk of documentary fraud,” said Barclays.
Barclays and Wave will now be working with a select group of trade finance clients to develop the service further.
It is hoped this landmark transaction could herald a new era of simpler, safer and faster trade documentation.