Blockchain technology could provide a useful tool in trade finance for anti-money laundering (AML) and countering terrorist financing (CFT) compliance according to an article posted on the Linked-In web site.
Blockchain technology, the underlying platform of the controversial cryptocurrency Bitcoin, is a decentralised ownership record or distributed public ledger of all transactions, which is mathematically signed to prevent unauthorised tampering.
The article posted by Group Chief Innovation Officer at Standard Chartered, Anju Patwardhan, suggests that with the use of blockchain technology, each leg of a transaction can be recorded and traced, making the ultimate destination and use of the funds clearer.
This, Patwardhan says in her article entitled Blockchain – a disruptive force for good?, means combating financial crimes such as money laundering becomes easier.
Trade finance application
She also suggests that trade finance is an area where the blockchain technology can be useful.
Traditionally trade finance has been a paper-intensive process says Patwardhan, who goes on to say that it is possible to use blockchain technology to digitise and authenticate trade finance records.
This, she concludes, can result in trade transactions that are secure, with digital records of related data visible to various participants in the trade transaction.
Categories: Trade Based Financial crimes News