Nordea Expanding we.trade to SMEs
According to a press release issued on May 9, the Nordic banking giant Nordea was now expanding its offering of we.trade, its blockchain-powered trading platform, to its SMEs (small- and medium-sized businesses), making it easier for them to trade with other firms in Europe.
The we.trade platform was developed in cooperation with 12 major banks using IBM’s blockchain technology.
Addressing Current Issues
The we.trade platform is going to reportedly help address trust issues that currently exist in today’s cross-border trades that are carried out by SMEs.
Nordea’s Head of Trade Finance and Working Capital Management, Patrik Zekkar stated that nearly 60% of SMEs had said that they needed to make advance payments before they could carry out cross-border transactions. According to Zekkar, this was a clear indication that there was a sense of insecurity in cross-border trading.
Zekkar stated that this situation was unfortunate, not just from a liquidity perspective, but also that it could lead to companies holding back from trading and not being able to grow.
How the we.trade Platform will Help
Using the we.trade platform, customers can choose certain events in a smart contract that will trigger payments to another party. Additionally, contracts can now be drawn up in multiple languages, thus making international transactions easier.
The company stated that by creating an ecosystem for both buyers and sellers, it had expanded into a new role, and could not interact with customers from the time an order was placed, rather than later when payments were being made.
According to Magnus Montan, the head of Nordea’s business banking division stated that they were seeing more and more SMEs being involved in cross-border trading, and that there were some common challenges that they were facing in that space. He stated that the biggest challenge that most SMEs faced was one of trusting their overseas trading partners.
Montan said that we.trade was not just about providing trade finance alone. It was about empowering trade and creating an ecosystem that could foster global trade, an integral part of which was trust.
Blockchain, Yes. Cryptos No.
While Nordea has embraced blockchain technology, the banking giant has taken a hardline stance against cryptocurrencies.
In December of 2017, the bank had shut down the account of Bitmynt AS, a Norwegian cryptocurrency exchange. The founder of the exchange had attempted to sue the bank for this action, however, lost the case in May of 2018.
Then, in January of this year, the bank banned its employees from trading in or owning BTC (bitcoin).
However, the bank faced some backlash with that move, when Danish workers’ rights groups threatened to take legal action against Nordea.