{"id":22551,"date":"2018-02-12T10:49:51","date_gmt":"2018-02-12T10:49:51","guid":{"rendered":"https:\/\/www.legalgeek.co\/?p=22551"},"modified":"2018-02-12T10:49:51","modified_gmt":"2018-02-12T10:49:51","slug":"first-blockchain-deal-wave","status":"publish","type":"post","link":"https:\/\/www.legalgeek.co\/first-blockchain-deal-wave\/","title":{"rendered":"#TBT World’s First Blockchain Trade Finance Deal"},"content":{"rendered":"

Blockchain is actually the most inefficient database other than a note book. We\u00a0believe\u00a0blockchain should be used only when all other technologies have failed.<\/p><\/blockquote>\n

These are the words of Gadi Ruschin, the CEO of Wave – the very same Wave which powered the world\u2019s first blockchain trade finance transaction back in 2016.<\/p>\n

So when the engaging Ruschin gave\u00a0Legal Geek<\/em>\u00a0this piece of his mind we almost fell off our office fit ball.<\/p>\n

But Ruschin\u2019s words should not be taken as disparaging or negative towards blockchain\u2019s potential. Far from it. He merely seeks to point out the potential for improvement when it comes to transferring value via a distributed digital ledger.<\/p>\n

You may remember the pioneering blockchain transaction which Wave executed in September 2016 between two Barclays clients:\u00a0Irish agricultural food co-operative Ornua and the Seychelles Trading Company.<\/p>\n

The transaction guaranteed the exportation of almost $100,000 worth of cheese and butter, a deal only previously possible via the movement of paper documents which would typically take between 10-14 days. The Wave-handled transaction was wrapped up in 4 hours.<\/p>\n

https:\/\/www.legalgeek.co\/event\/disrupting-legal-industry-meetup\/<\/p>\n

The transaction was significant as it was\u00a0a live pilot without any compromise on the business transactions of the parties involved, which included not just the two companies exchanging goods for money but a shipping company, an insurance company and Barclays as the bank for both\u00a0Ornua and the Seychelles Trading Company.<\/p>\n

\u201cInternational trade is not only the world\u2019s biggest industry but we know this industry very well so it was an appropriate sector for the pilot.<\/p>\n

\u201cBut it is an industry which still uses paper documents. Why? Because although every industry knows how to standardise and\u00a0digitise\u00a0itself,\u00a0trade involves more than one\u00a0industry\u00a0and when those industries want to create\u00a0standards\u00a0or digitise data, it’s much more complicated.<\/p>\n

\u201cPeople trust paper documents because when you have a paper document, no one can take it off you. \u00a0 \u201cBut blockchain makes digital bearer documents possible. So although it is very inefficient, it is more efficient than exchanging paper documents.\u201d<\/p>\n

Wave\u2019s pioneering transaction was completed over 16 months ago. But how has Wave progressed since then and how has blockchain progressed as well?<\/p>\n

Ruschin is diplomatic on this.<\/p>\n

\u201cThe industry is still in an early stage when it comes to blockchain and not too many use it,\u201d he says. \u201cThere is a lot of talk about it but not much practical application. Proof of concepts are fine and always successful \u2013 but are very sterile environments.<\/p>\n

\u201cFor Wave, I was never under the impression that our transaction would change the world, however it\u2019s the\u00a0beginning\u00a0and it definitely gave some promotion to the Wave brand as well.\u201d<\/p>\n

Wave have since gone on to run similar pilots with Israeli shipping company ZIM and Spanish banking group BBVA, delivering successful results on both occasions.<\/p>\n

Yet wider industry uptake of blockchain for international trade transactions is still far from even being on the horizon.<\/p>\n

So Ruschin is instead focusing on what he can control: moving his company forward. And in that regard he has some influential friends.<\/p>\n

Barclays \u2013 whose relationship with Wave started when Wave participated on the Barclays Accelerator programme in 2015 \u2013 have remained a strong supporter of Ruschin\u2019s company following the September 2016 pilot.<\/p>\n

\u201cThey are extremely supportive,\u201d effuses Ruschin. \u201cThey have introduced us to many other companies in the industry. They are not trying to keep us for themselves. They realise that Wave is useless if it\u2019s just for them. Blockchain\u00a0networks\u00a0like Wave\u00a0need to be for as many parties as possible for it benefit anyone.\u201d<\/p>\n

\"\"Gadi Ruschin<\/strong> is the CEO of Wave, an Israel-based FinTech company which\u00a0provides a platform to connect all members of a supply chain to facilitate a direct exchange of documents without the need to trust any third party.<\/p>\n

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