One of the industries most suited to blockchain technology is trade finance. Many of the world’s largest banks devote time to research and development.
Thanks to a consortium of 71 global financial leaders, R3CEV, much has been revealed about the potential uses of blockchain technology.
Since 2016, R3 has carried out several market trial runs to complement their research. They will continue to improve these strategies until they are ready to enter the market fully.
So, what are some of their findings regarding potential use? Here’s the future of trade finance with blockchain technology companies.
Monitor status and status in real time
One of the R3 members, CBA, is a major contributor to blockchain technology research. Currently, they are undergoing 3 different projects to analyze the use of the blockchain.
They are doing a trial run with the exporters who ship the cotton. A humidity monitor is placed inside the enclosure, which is connected to IoT and GPS.
This screen allows consumers to track their shipments in real time. They are also able to assess the condition of their product in transit.
Other national blockchain technology companies are running pilots, similar to this study. In Singapore, Hellosent is running similar tests. However, they are considering importing French wine.
Cancellation of unpaid settlements
A growing issue for grain growers is financial loss due to business bankruptcy. An estimated $50 million was lost in 2014 due to this activity.
It takes farms approximately 4-6 weeks to receive payment for their shipments. At this point, disagreement often arises between growers and buyers over payment intricacies (non-payment of the proper amount, late payment, etc.).
Australian startup Full Profile has taken matters into its own hands.
Their blockchain platform allows farmers to receive automatic payment upon grain delivery. This will greatly reduce the risk of disagreement between growers and buyers.
Once Full Profile is fully operational in a domestic environment, it will expand into foreign trade.
The use of blockchain technology can also be beneficial in reducing financial losses and risks. After further development, he will be able to digitize sales and legal arrangements.
Trade finance is an impractical industry, which relies heavily on settlements and contracts. Right now, most of these agreements are handled the old-fashioned way: hard copies.
Blockchain technology will eliminate the need for this paper system. This ultimately reduces the risk of financial loss as documents are often lost, mishandled or smeared.
Electronic documents can be tracked more efficiently. It also eliminates the need for a third party verification system.
Are you interested in learning more about Blockchain technology companies?
Blockchain technology creates transparency in the financial trade between buyers and sellers. From the moment an order is placed until payment is made, the blockchain is able to streamline the trade process.
Are you looking to jump into the world of international trade? You are in the right place. It would be great to know your thoughts and comments.