USING BLOCKCHAIN TECHNOLOGY COMPANIES FOR TRADE FINANCE

July 2018 ยท 2 minute read

Among the most propitious businesses for blockchain engineering is trade finance. Many of the world’s largest banks are putting time into its development and research.
As a result of a consortium of all 71 international financial leaders, R3CEV, much has been discovered about potential uses of blockchain technology.
Since 2016, R3 has executed several pilot conducts in the market to match their research. They’ll continue to improve these plans until ready to fully enter the marketplace.
So, what are some of the findings of potential use? Here’s the future of trade finance with blockchain tech businesses.

Among R3’s members, CBA, is a top contributor to the research of blockchain technology. Currently, they are experiencing 3 distinct jobs to examine blockchain usage.
They are conducting a trial run using exporters who ship cotton. A humidity monitor is placed inside the canister, which can be linked to IoT and GPS.
This monitor enables customers to track their shipments with real-time standing. Furthermore, they are able to assess the state of their product as it travels through.
Other federal blockchain tech organizations are running pilots, similar to this study. In Singapore, Hellosent is running similar tests. However, Cryprtocurrency Exchange Solutions studying the import of French wine.

Eliminate Unpaid Settlements


A growing problem for grain farmers would be a monetary loss due to trade insolvencies. An estimated $50 million was dropped in 2014 because of the activity.
It takes roughly 4-6 weeks for a farmer to receive payment for their shipments. At that, often times conflict appears between buyers and farmers over payment issues (neglecting to pay the right amount, late payment, etc.).
Australian start-up, Full Profile, has taken matters into their own hands.
Their blockchain platform allows farmers to now receive automated payment upon delivery of grains. This will significantly lower the risk of dispute between farmers and buyers.
Once Full Profile’s application is fully operational in a domestic setting, they’ll expand on external transaction.
Digitize
The use of blockchain technology may also be beneficial for reducing fiscal loss and threat. Upon further development, it is going to have the ability to digitize legal and sales agreements.
Trade fund is an unwieldy industry, which is based heavily on settlements and contracts. Currently, most of these agreements are handled the traditional way: paper copies.
Blockchain technology will eliminate the need for this paper-based system.
Electronic documentation can be monitored far better.

Blockchain technology creates transparency in financial trade between buyers and sellers. From the moment a purchase is created up until payment, blockchain is capable of simplifying the trade procedure.