Sumitomo Mitsui Banking Corporation (SMBC), the third largest bank by assets in Japan, is set to begin utilizing R3's Marco Polo trade finance blockchain on a commercial basis by the end of the year.

The bank said on Friday last week that a cross-border proof-of-concept test was successfully completed involving Mitsui & Co, a Japanese general trading company, Indorama Ventures, a Thai company in the intermediate petrochemicals business, and Bangkok Bank, Thailand's third-largest bank.

In the course of the exercise, Bangkok Bank issued a payment guarantee for Indorama Ventures to Mitsui & Co. Based on that guarantee, SMBC would have been able to undertake receivable financing in a real-world setting.

The platform allows for participants to update purchase orders, invoices, logistics information, shipping schedules and port information, while auto-matching leads to highly-efficient data reconciliation, according to the statement.

Currently, the trade financing process remains to be manual and paper-based and is seen as highly inefficient.

Marco Polo

, which utilizes open-source Corda, is a network backed by Dublin-based TradeIX and New York-based R3 LLC. It counts a number of major financial institutions as its members, including Bangkok Bank, Mitsui & Co, SMBC, Bank of America, BNP Paribas, Mastercard, Standard Chartered, among others.

The network recently completed tests for trade finance transactions between Russia and Germany.

Trade finance using blockchain is a busy space, with an estimated 30 consortia seeking to apply the technology to the business. Competitors include Voltron, which also utilizes Corda and counts Bangkok Bank, HSBC and Standard Chartered among its partners, as well as ethereum-based CargoX and eTrade Connect, which uses. Hyperledger Fabric.

The recent test follows a similar proof-of-concept exercise conducted by the SMBC earlier in the year, also involving Mitsui & Co. Very little information was provided by the bank about the February 2019 test, but it said at the time that it expected to commercialize Marco Polo by Q3 this year.

SMBC image via Shutterstock