One of the most favorable industries for blockchain technology is trade finance. Many of the world’s largest banks invest time in its research and development.
Thanks to a consortium of 71 global financial leaders, R3CEV, much has been revealed about the potential use of blockchain technology.
Since 2016, R3 has conducted several pilot runs in the market as a complement to its research. They will continue to refine these strategies until they are fully ready to enter the market.
So what are some of their results that can be used? Here is the future of trade finance with blockchain technology companies.
Real-time status and monitoring
One of the members of R3, CBA, is a leading participant in blockchain technology research. They are currently undergoing 3 different projects to analyze blockchain use.
They are conducting a test run with exporters who supply cotton. Inside the canister is a humidity monitor that is connected to IoT and GPS.
This monitor allows consumers to track deliveries in real time. In addition, they can assess the condition of their product during its journey.
Other national technology companies working on the blockchain are working with pilots, similar to this study. In Singapore, Hellosent is conducting similar tests. However, they are studying the import of French wine.
Elimination of unpaid settlements
A growing problem for farmers is the financial loss due to the insolvency of trade. An estimated $ 50 million was lost in 2014 due to this activity.
It takes the farmer about 4-6 weeks to get paid for their supplies. In this case, there is often a conflict between farmers and buyers due to complications in payment (non-payment of the amount, late payment, etc.).
The Australian startup, Full Profile, has taken matters into its own hands.
Their blockchain platform allows farmers to now receive automatic payment when delivering grain. This will greatly reduce the risk of disputes between farmers and buyers.
Once the “Full Profile” app is fully functional at home, they will expand on foreign trade.
The use of blockchain technology can also be helpful in reducing financial losses and risk. With further development, it will be able to digitize sales and legal arrangements.
Trade finance is an inefficient industry that depends heavily on settlements and contracts. Currently, most of these agreements are executed in the old way: paper copies.
Blockchain technology will remove the need for this paper system. This ultimately reduces the risk of financial loss as documents are often lost, improperly processed or soiled.
Electronic documentation can be tracked much more efficiently. In addition, it eliminates the need for an independent verification system.
Interested in learning more about Blockchain technology companies?
Blockchain technology creates transparency in financial trade between buyers and sellers. From the moment of placing an order until payment, the blockchain is able to simplify the trading process.
Do you want to jump into the world of international trade? You are in the right place. It would be great to know your thoughts and comments.