Two banks separated by continents and a trading company have successfully initiated the first interbank trade transaction using blockchain technology, smart contracts and the Internet of Things (IoT). The banks – Commonwealth Bank of Australia in Australia and Wells Fargo in the US – and Brighann Cotton in Australia were involved in this transaction, which took place between Brighann Cotton US and Brighann Cotton Marketing Australia. It involved shipment of 88 bales of cotton from Texas, USA to Qingdao, China. The letter of credit was executed through a digital smart contract stored on a private distributed ledger – using Skuchain’s Brackets system. The use of IoT in the Brighann Cotton trade involves a GPS device that tracks the geographic location of the goods in transit. The tracking feature allows for greater certainty compared with traditional open account and trade instruments like letters of credit, which focus on documents and data, and can take days to process. Once the goods arrive at its final destination in Qingdao, a notification will be sent and the smart contract will automatically trigger the release of payment. The cotton is still being transported and the payment of around US$35,000 will be made upon arrival.
