Marco Polo, the trade finance blockchain network launched in 2017 by R3 and TradeIX, is moving slowly but surely toward production.

The latest milestone in the 22-bank blockchain consortium’s methodical piloting process allows a third party to a trade (in this case a logistics provider) to trigger a payment to a supplier in real-time at the moment the goods are on their way to their destination.

This work builds on the first Marco Polo test transactions carried out in March of this year between two member banks – LBBW and Commerzbank – which executed a trade between engineering technology firm Voith and KSB SE, a pump and valve manufacturer. This time, besides the two companies involved, logistics provider Logwin AG added data to the blockchain and initiated the payment obligation.

Gerald Böhm, head of guarantees and trade finance at Voith, said in a statement on Wednesday:

“For the first time, we have processed the purchase and delivery of special hydraulic couplings from Germany to Taiwan using blockchain technology. We executed this transaction with KSB, the leading pump and valve manufacturer, via the Marco Polo network.”

Ralf van Velzen, head of export financing at KSB SE & Co, added: “As a buyer, together with our bank we can ensure that the payment commitment becomes effective only if the goods are actually in the hands of the logistics provider, and on their way to the delivery destination”

Global trade and its transactional banking arrangements are hampered by data being locked in silos and in some cases paper-based processes. Getting participants on the same page and working together in real-time removes risk from trade networks. Or, as elegantly stated in a recent report by TradeIX, up until now, trading parties have simply been sending and receiving messages that are reflections of the past, not the present.

Busy space

Because of the obvious efficiency gains, blockchain-based trade finance is now a busy space. There are some 30 consortia working in this area, including Voltron which also runs on R3’s Corda network; ethereum-based CargoX; and Asia-focused eTrade Connect, which works on Hyperledger Fabric.

In terms of how this race is being run, first out the blocks into live production was we.trade, the IBM Blockchain partnered European SME-focused trade consortium, which also runs on Hyperledger Fabric. There are clear interoperability plays on the side of the Corda and Fabric networks, and there are also some banks involved in multiple projects running on different flavors of DLT.

Things look promising in the long run for firms running on R3’s open-source Corda, which is growing into a vibrant network. So while we.trade forges onward (and it may be some time in 2020 before Marco Polo sees the full light of day) there are some tantalizing possibilities ahead for Corda users, such as enabling instant of settlement of trades via “cash on the ledger.”

In a recent interview showcasing Corda-based Digital Asset Shared Ledger (DASL), Richard Crook, CEO of Lab577 predicted that goods and services would soon be able to flow one way across the ledger and the payment for those goods and services to flow the other way on the same ledger.

“In the case of trade finance, you want to have stores of value on-chain which the Marco Polos and the TradeIXs of the world can use,” he said.

Marco Polo travels image via Shutterstock