One of the most conducive industries for blockchain technology is trade finance. Many of the world’s largest banks are spending time on their research and development.
Thanks to a consortium of 71 global financial leaders, R3CEV, much has been discovered about the potential uses of blockchain technology.
Since 2016, R3 has run several pilot tests in the market to complement its research. They will continue to improve these strategies until they are ready to fully enter the market.
So what are some of your potential use findings? This is the future of trade finance with blockchain technology companies.
Monitor status and condition in real time
One of R3’s members, CBA, is a major contributor to blockchain technology research. Currently, they are in 3 different projects to analyze the use of blockchain.
They are running a test with exporters who ship cotton. A humidity monitor is placed inside the container, which is linked to IoT and GPS.
This monitor allows consumers to track their shipments with real-time status. Plus, they can assess the condition of your product as it travels.
Other national blockchain technology companies are running pilots, similar to this study. In Singapore, Hellosent is conducting similar tests. However, they are studying the importation of French wine.
Delete unpaid deals
A growing problem for cereal producers is the financial loss due to business insolvencies. An estimated $50 million was lost in 2014 due to this activity.
It takes approximately 4-6 weeks for a farmer to receive payment for his shipments. At that time, conflicts often arise between farmers and buyers due to payment complications (not paying the proper amount, late payment, etc.).
Australian startup, Full Profile, has taken matters into its own hands.
Its blockchain platform allows farmers to receive automatic payments upon grain delivery. This will significantly reduce the risk of disputes between farmers and buyers.
Once the Full Profile application is fully functional in a national environment, they will expand to foreign trade.
digitize
The use of blockchain technology can also be beneficial in reducing financial losses and risks. After further development, you will be able to digitize sales and legal agreements.
Trade finance is a difficult industry to navigate, heavily reliant on agreements and contracts. Currently, most of these deals are handled the old-fashioned way: paper copies.
Blockchain technology will eliminate the need for this paper-based system. Ultimately, this reduces the risk of financial loss, as documents are often lost, mishandled, or tarnished.
Electronic documentation can be tracked much more efficiently. Plus, it eliminates the need for a third-party verification system.
Interested in learning more about Blockchain technology companies?
Blockchain technology creates transparency in financial trading between buyers and sellers. From the moment an order is placed to payment, blockchain is capable of simplifying the business process.
Are you looking to make the leap into the world of international trade? You are in the right place. It would be great to know your thoughts and comments.
