Wells Fargo and the Commonwealth Bank of Australia (CBA) have used blockchain – the technology that drives bitcoin – to process and execute a shipment of cotton from the U.S. to China, in a move that could provide a big breakthrough for the future of international trade.
Blockchain works like a huge, decentralized ledger for the digital currency bitcoin, recording every transaction and storing this information on a global network so it cannot be tampered with. It's this technology that banks feel can be used in areas from remittances to securities exchanges in order to slash costs and create a fraud-proof record of transactions without the need for third-party authorization.
Australia's Brighann Cotton Marketing bought the shipment, which was going from Texas to Qingdao, China.
Typically this process would require large amounts of paper work, back-and-forth communication between all parties via email or fax, and the need to ensure everybody's records are up-to-date and the same.