Blockchain Explained V

Use Case – Letter of Credit
What?
•
Bank handling letters of credit (LOC) wants to o
ff
er them 
to a wider range of clients including startups 
•
Currently constrained by costs & the time to execute
How?
•
Blockchain provides common ledger for letters of credit
•
Allows bank
and counter-parties to have the same 
validated record of transaction and fulfillment
Benefits
•
Increased trust
•
Increase speed of execution (less than 1 day)
•
Vastly reduced cost
Why? 

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201
6
IBM Corporation 
21
Use Case – Corporate Debt (or Bond)
What?
•
Bank holding a corporate debt would like to 
–
pay vendors quickly for transactions validated by the
client 
–
allow the corporate client to see the payment is made 
–
provide government with oversight of the process
How?
•
Blockchain provides a common ledger for recording the 
corporate debt / bond, 
•
available to bank, corporate client, vendors & government.
Benefits
•
Speeds up vendor payments bigger net discounts
•
Eliminates risk and accelerates decision making
•
Owning bank can spread the cost across each market.
Why? 

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©
201
6
IBM Corporation 
22
Use Case – Business to Business Contracts
What?
•
Buyer wants e
ffi
cient way of converting a purchase order 
into validated, self executing contract updated to reflect 
the status of the supply. 
•
Agreement must be visible to the buyer, the seller, banks, 
logistics partners and other stakeholders.
How?
•
Blockchain provides a shared record of the contract 
status which is updated as the contract progresses. 
•
Available to all parties to the agreement, their banks and