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Komgo and Lloyds Bank Team Up for Blockchain-Based Commercial Banking System

Lloyds Bank, a self-described “retail and commercial bank” based in Wales and England, is partnering with Komgo, a blockchain technology firm, to build a personalized blockchain for its banking division, reports FStech. The platform, in turn, would ensure faster international trades for the company.

Komgo’s mission is to bring the entire trade finance process to the digital era, ensuring that clients can trade all sorts of information across the world in a decentralized and secure way, the publication notes. Of course, it’s also way faster than traditional methods as well. Then, there’s also the case of security and tracking that blockchain technology brings with, which is beneficial for businesses that need to see where their money is being transferred to.

A decentralized business expansion

After agreeing to ban Facebook’s Libra cryptocurrency, Germany is now doubling down on its plan to stop parallel currencies. Germans recently passed a strategy that touches blockchain and cryptocurrency comprehensively and vows against parallel financial systems initiated by corporations. Berlin buckles up for the fight German chancellor Angela Merkel and her cabinet passed a comprehensive blockchain strategy on Wednesday. The government believes that the economy should make use of digital transformations but must also be aware of the risks arising out of these technologies. Finance minister Olaf Scholz said that blockchain technology could become the basis for the internet of the future. He also said, “We want to be at the forefront and further strengthen Germany as a leading technology location. At the same time, we must protect consumers and state sovereignty. A core element of state sovereignty is the issuing of a currency, we will not leave this task to private companies.” The government also wants to work in close cooperation with its European and global peers to ensure that stablecoins don’t end up becoming alternative currencies. Berlin will also focus on its dialogue with German central bank, Bundesbank, to talk about a digitized version of the central bank currency and the possible risks of such coins. Germany’s move is a threat to Facebook The German government has a holistic plan to tackle growing issues with digital currencies. However, it plans on introducing electronic bonds in the domestic market that will be issued on blockchains. The government, alongside France, has already pledged to ban Libra. The French authorities have also adopted a highly critical stance on Facebook’s Libra, and they are also looking forward to launching a digitized legal tender of their own. Meanwhile, the European Central Bank is also looking forward to the creation of a public digital currency, backed by central banks, that would eliminate the need for Libra. Francois Villeroy de Galhau, a member of the ECB board, said that Libra highlighted the gaps in European regulations and said that the company would be treated with a tough approach. This would create further regulatory and operational hurdles for the American social media giant that aims to leverage its 2+ billion userbase to launch a new digital currency. Libra will be a stablecoin backed by government securities, but with European countries launching their own government-backed stablecoins, it will face stiff competition in the market.

Lloyds Bank is the first bank to partner with the platform. Gwynne Master, the managing director for the bank’s Commercial Banking branch, said the following regarding the matter:

“‘Cumbersome’ and ‘time-consuming’ are just two words used to describe international trade today. The process of trading a single commodity can take over 100 days, involves many players, considerable paperwork, and risk. Trade is particularly onerous for our commodities clients, where faster turnaround times and a streamlined channel are key requirements.”

Master went on, speaking specifically about Komgo this time:

“We’re working together to shorten the time it takes our corporate clients to trade internationally by significantly streamlining and digitising the process. We’re entering a new era of simpler and more inclusive access to blockchain technology that has the potential to support strong, collaborative business relationships. Partnerships like this, and the technology that underpins them, will help mitigate the pain points our clients face and support British businesses to prosper internationally.”

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