Banks are collaborating with tea farmers on a year-long blockchain technology project that tries to create more sustainable and transparent supply chains.
A group of banks and fintech start-ups are supporting a pilot using blockchain technology to support Malawian tea farmers.
Barclays, BNP Paribas, and Standard Chartered are collaborating with tea farmers on a year-long blockchain technology project that tries to create more sustainable supply chains.
The pilot has received more than 600,000 euro in private and public funding to date. The goal of the project is to provide more detailed and reliable information about the environmental and social standards achieved in the supply chain. Additionally, the trial will reward sustainability with cheaper working capital.
How does it work?
The technology works by gathering information from farmers about their production, quality, and price with the help of virtual identifiers that are encoded on a blockchain ledger. In this way, second and third tier supplier information becomes available to all parties that have access to the blockchain ledger. The aim is to make the supply and its sustainability information more traceable and transparent.
“This technology has the real potential to help banks access more detailed and more reliable information about social and environmental impacts in a secure way, throughout the entire supply chain.“, says Marguerite Burghardt, head, trade finance competence center, BNP Paribas.
The collaborative project will test technology from four fintech start-ups, including a blockchain-based supply chain service from Provenance and a system introduced by Halotrade, as Finextra reported. Also, Landmapp will reportedly provide land rights documentation via mobile technology and Focafet Foundation will make sure that open-source data standards are strictly followed.