Eastern and Southern African Trade and Development Bank (TDB) Closes a $22 million Sugar Deal Using Smart Contract Blockchain Technology.
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Eastern and Southern African Trade and Development Bank (TDB) closes a $22 million sugar deal in its first live trade-finance transaction using smart contract feature of blockchain tech.
The news broke out during the AfricaCom event in Cape Town in the previous weeks.
During the million dollar sugar deal, a letter of credit confirmation and a discounting transaction were digitally passed in a private blockchain. This reduced the usual four days period set for cross-border payments.
“With this transaction, we have the potential to revolutionise how we finance cross-border trade at the bank,” said Michael Awori, chief operating officer at TDB, the financial arm of the Common Market for Eastern and Southern Africa (COMESA).
The smart contract feature of the blockchain technology used will third party interruption and minimize risks that will arise from inconsistencies in the exchange or amending of documents.
We have plans to carry out ten billion dollars worth of African trade transactions with the Asia Pacific region, including Japan, by June 2020,” said Samir Neji, CEO of dltledgers, an enterprise blockchain company that was involved in the deal.
Blockchain technology’s biggest contribution will be in the financial sector – redefining what money is and how it works,” said Farzam Ehsani, co-founder and CEO of South Africa-based VALR.com, which last year launched a digital asset trading platform.
The African region is popularly interested in bitcoin which surfaced from google search trends listing Nigeria, South Africa and Ghana on the top list.
According to Gartner’s popular forecasts for 2020 and beyond, 50 percent of people in Africa with a smartphone but without a bank account will start to operate a cryptocurrency account with their mobile devices by 2025.
Popular search interest in blockchain in Africa can be traced to popular financial-related topics including crytocurrencies like bitcoin. The interest focused search on Bitcoin is understandable considering the number of unbanked in Africa.
Africa is expected to lead the cryptocurrency space considering the growth rate in fintech platforms offering mobile payments services in bills, card recharge and utility payments.
Moreso, with an increase in capital venture funds from different companies, cryptocurrency will drive peer to peer payments as Nigerian regulators support fintech startups to access capital markets.