As part of a pilot, transactions between tech group Voith and pump and valve manufacturer KSB SE were mapped for the fist time using blockchain. One transaction involved the delivery of hydraulic couplings from Germany to China, while the other saw the delivery of pumps within Germany.

The order and delivery details were agreed between the firms via the Marco Polo network and the payment term was secured by a conditional commitment from the buyer's bank. After delivery, the corresponding delivery details were entered into the network and automatically matched with previously agreed data, triggering an irrevocable payment obligation on the part of the buyer's bank. The flow of information was mapped by the R3 Corda platform.

The partners say that the experiment was a success: normally the number of intermediaries involved and the large number of physical documents make securing payments of commercial transactions with traditional instruments complex and labour intensive.

But the DLT platform made it possible to secure the transaction by a payment commitment through the digital exchange of trade data which can also be financed on behalf of the supplier by its bank.

Next up, the partners aim to carry out the complete execution of transactions via Marco Polo, with a direct connection to the customers' management system for a completely seamless process.

Eventually, the aim is to expand the network to more banks and participants from the transportation and insurance sectors so that the entire value chain for foreign trade transactions is represented digitally with data.

Nikolaus Giesbert, divisional board member for trade finance and cash management, Commerzbank, says: "The transaction proves that blockchain technology offers our clients a payment undertaking and state-of-the-art financing for trade transactions with both foreign countries and domestically."