One of the most favorable industries for blockchain technology is trade finance. Many of the world’s largest banks are devoting time to its research and development.
Thanks to a consortium of 71 global financial leaders, R3CEV, much has been revealed about the possible use of blockchain technology.
Since 2016 R3 conducted several test runs on the market to complement their research. They will continue to develop these strategies until they are ready to enter the market fully.
So what are the implications for their potential use? This is the future of trade finance with blockchain technology companies.
Monitor status and status in real time
One of the members of R3, CBA, is a major contributor to research on blockchain technology. They are currently running 3 different blockchain usage analysis projects.
They are conducting a pilot test with exporters who transport cotton. Inside the canister is a humidity meter connected to the internet and GPS.
This monitor allows users to track their shipments in real time. In addition, they can assess the condition of their product while traveling.
Other national blockchain technology companies are conducting pilot work similar to this study. In Singapore, Hellosent is conducting similar tests. However, they are studying the import of French wine.
Eliminate unpaid bills
A growing problem for grain growers is the financial loss due to insolvency due to trade. It is estimated that due to this activity in 2014. 50 million were lost. USD.
It takes about 4-6 weeks for a farmer to receive payment for his consignments. Meanwhile, conflicts between farmers and buyers often arise due to payment complications (failure to pay the right amount, late payment, etc.).
Australian starter Full Profile has taken matters into its own hands.
Their blockchain platform now allows farmers to receive automatic payment for grain delivery. This will significantly reduce the risk of disputes between farmers and buyers.
Once the Full Profile program is fully functional internally, it will expand its external trade.
The use of blockchain technology can also be beneficial in reducing financial losses and risk. As it develops further, it will be able to digitize sales and legal agreements.
Trade finance is an awkward industry that relies heavily on settlements and contracts. At present, most of these agreements are handled in antiquity: paper 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 damaged.
Electronic documentation can be tracked much more efficiently. In addition, it eliminates the need for a third-party inspection system.
Want to know more about Blockchain technology companies?
Blockchain technology creates transparency in financial trade between buyers and sellers. From the moment an order is placed to the time of payment, a blockchain can simplify the trading process.
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