Cryptocurrency has not quite had the same admiration as blockchain technology across other industries. With the new we.trade platform, how will customers be able to participate in trading? What does this mean for cryptocurrency for the involved banks?
- Nordea opens blockchain-based trading for SMEs.
- The bank remains adamantly against cryptocurrency use.
Banks have been adapting to the presence of crypto firms in their markets over the last ten years, leaving them with only a few options – accept it, reject it, or join the crowd. Slowly but surely, more financial institutions are choosing to get involved instead of staying on the sidelines. Nordea, a Nordic private banking institution, has chosen to join in, opening up we.trade trading platform that will better assist small and middle-sized customers (SMEs). The announcement was made via press release on May 9th.
By offering this platform to SMEs, Nordea becomes part of the sector that will deal with the deficits appearing in cross-border trades. Explaining more deeply, Global Head of Trade Finance and Working Capital Management at Nordea Patrik Zekkar said that “almost 60 percent of SMEs” have been forced to make payments in advance, due to their lack of trust and security in cross-border trade. Zekkar calls this circumstance “unfortunate,” since it impacts liquidity and could keep companies to just stay out of these types of trade entirely.
The we.trade platform allows participants to single out specific events that occur in a smart contract. This selection will end up causing an automatic payment to another party. The project combines the work of 12 different banks in different regions of the world, including Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Santander, Société Générale and UniCredit. Based on the IBM Blockchain, the first operations available to the public started in June last year. Nordea’s decision to join the project happened back in 2017, though they did not create an opportunity for customers to use it until a soft launch for select individuals last month.
Even though it is clear that Nordic bank has faith in blockchain technology in the financial industry, the same is not said of cryptocurrency. Instead, last January, the bank created a policy that prohibited employees from possessing any Bitcoin. When the ban was announced, legal action was quickly threatened by Danish finance and workers’ rights figures.