AIG and TradeIX complete blockchain-enabled trade finance transaction

AIG and TradeIX complete blockchain-enabled trade finance transaction

AIG and TradeIX complete blockchain-enabled trade finance transaction

American International Group (AIG) and TradeIX have completed the first blockchain-enabled trade finance transaction for a global logistics company.

TradeIX and global insurer AIG have partnered to enable trade finance transactions for companies, using the blockchain-enabled TIX platform. Trade finance programmes give companies access to capital, allowing them to improve their payment terms with their suppliers and clients.

This invoice finance transaction took place at the end of September and enabled the logistics company to help its customers extend their payment period whilst maintaining the company’s receivables at current terms. The financing was offered by Standard Chartered and credit risk mitigation was offered by AIG.

TradeIX has developed a trade finance platform powered by permission-based distributed ledger technology. By using this ledger, companies can have their invoices placed securely on the TIX platform, giving real-time visibility to manage customer terms and credit risk. All details of the invoice and the eligible insured amount are securely recorded on the distributed ledger.

The invoices are sold to the finance providers and credit insured by AIG.  AIG also provides the use of Aronova, its trade finance technology provider, which tests policy invoice eligibility for the insured financiers.

Marilyn Blattner-Hoyle, head of supply chain and trade finance at AIG, said: “Using blockchain technology to facilitate trade finance transactions makes it easier for companies to benefit from trade finance, allowing more companies better access to working capital and making insurance more available to finance-providers.

“By using this blockchain-enabled platform, clients are able to benefit from the extended ecosystem that trade finance brings, but with a reduction in friction and cost and an improvement in speed and transparency.”