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Blockchain promotes in-depth exploration in the field of trade finance

Time : 14/03/2022 Author : jtfn0x Click : + -
        Blockchain technology is the core technology that has the most potential to trigger the fifth round of disruptive revolution after steam engine, power, information and Internet technology. Blockchain is an open self-made account book system, which has the characteristics of decentralization, tamperability, traceability, trust and programmability. It is mainly divided into public blockchain and private blockchain. Through the use of public blockchain, the dependence of most economic transactions on existing financial institutions is reduced, while within financial institutions, private blockchain can be fully used to reduce mistrust of central nodes, improve work efficiency and reduce costs, Promote economic activities in the network era to become more concise and easy, make the flow of financial assets more transparent and convenient, and greatly expand the breadth and depth of shared finance.
        At present, the application of blockchain has extended from digital currency to financial services, Internet of things, intelligent manufacturing, supply chain management, digital asset trading and other industries. In addition to the relatively mature application in the financial services industry, the application in other industries is still in the initial stage of exploration. The following is an introduction and analysis of the latest application progress of blockchain in the field of trade finance:. Barclays Bank Seychelles branch (issuing bank) issued a letter of credit with Barclays UK branch as the designated bank, marking the completion of the world's first letter of credit transaction using blockchain technology. The blockchain platform app developed by wave company mainly makes use of the registration and transfer function of digital assets on the blockchain to realize the registration, transmission and transfer of electronic bill of lading on the blockchain, complete the electronic delivery under the letter of credit, and change the bill of lading from the traditional endorsement transfer to the ownership transfer through the wave platform; The traditional delivery of goods to the holder, Convert to a faster and more reliable identification through QR QR QR code (the paper documents are encrypted and recorded through blockchain technology, and the electronic encrypted documents are transmitted to many parties. The transfer of digital assets is supervised by the public on the blockchain. Once one of the encrypted documents is forged, it will be immediately found by other nodes. All documents can be tracked through the security network, which solves the problems of slow transmission process, easy loss and forgery of paper documents).
        After the beneficiary delivers the goods, the carrier issues the bill of lading and uploads it to the wave platform. Through the wave platform app, the shipping company can send the electronic bill of lading to the seller (shipper), and the seller will send other electronic documents required under the letter of credit to the designated bank. The designated bank will finance after confirming that the documents are consistent, and send the documents to the issuing bank. The issuing bank shall review the documents and send them to the buyer after confirming their conformity. The buyer sends the electronic documents to the customs clearance agent to help him pick up the goods and complete the transaction. Blockchain based cross-border payment is actually a cross-border payment mediated by virtual currencies such as bitcoin or ripple currency. The system first converts the legal currency of the remitter's location into token, and then converts the token into the legal currency of the payee's location at the receiving end, so as to complete cross-border payment.
        Faster: in the traditional cross-border payment mode, banks need to process payment transactions in batches at the end of the day. Usually, a cross-border payment takes at least 24 hours to complete. The cross-border payment based on blockchain is close to "real-time", and it is a 7x24 hour uninterrupted automatic service;. Cheaper: the cross-border payment based on blockchain greatly reduces the cost of cross-border payment by eliminating the cost of swift, reducing the cost of labor, compliance, error investigation and foreign exchange exchange;. More liquidity: in the traditional cross-border payment mode, banks need to hold currency positions of multiple countries in current accounts to meet the clearing needs. In the cross-border payment mode based on blockchain, virtual currency is used as the intermediary, which reduces the occupation of position funds and increases liquidity.
        At present, ripple, oklink and snapcard have carried out cross-border payment services based on blockchain technology. Visa, a card organization, and chain, a blockchain technology company, have created a payment platform "visab2bconnect", which will mainly serve large cross-border payments by financial institutions. UBS, Deutsche Bank, Santander and Bank of New York Mellon announced in August 2016 that they had jointly developed new e-money, and hoped that in the future, inter-bank clearing could be carried out through blockchain technology. Previously, the international blockchain Financial Alliance R3 released a shared ledger platform for recording, managing and synchronizing financial agreements between regulated financial institutions &mdash& mdash; Corda also hopes to reduce or eliminate various risks and costs in international payment and other applications and realize real-time cross-border payment in the long term by developing solutions based on blockchain technology.
        The application of Barclays Bank to blockchain this time is essentially to use blockchain technology to complete the electronic document delivery under the letter of credit, and the issuance, document review, financing, delivery and other processes are consistent with the traditional process, which has not played a disruptive innovation to the letter of credit. The core feature of blockchain technology is that it can realize value transfer in a quasi real-time manner without the participation of a trusted third party. In the future, the programmability of blockchain can be used to program settlement tools into smart contracts, and based on blockchain technology, it can be connected with digital currencies and digital assets on the chain. After the conditions for the smart contract are met, the point-to-point real-time clearing and settlement can be automatically completed.
        This can significantly reduce the cost of value transfer, shorten the clearing and settlement time, and protect the privacy of all parties to the transaction. Although blockchain has many advantages, there are still some problems to be solved due to its own characteristics. Due to the great advantages of blockchain in the field of settlement and clearing, it is possible to replace the bank's document personnel and other relevant middle and back office personnel in the future. The decentralized nature of blockchain also challenges the survival of banks. Facing the huge development potential of blockchain in the future, it is recommended that banks take the following countermeasures:. Use blockchain technology to improve efficiency and reduce operational risks. Banks should start the research on blockchain technology as soon as possible, especially the research on alliance chain and private chain, and make use of the advantages of blockchain technology in clearing, settlement, payment and other fields to improve the competitiveness of banking business.
        Strengthen inter-bank cooperation, join the blockchain industry alliance, plan the strategic layout of the blockchain field as soon as possible, establish its position within the industry, and participate in the formulation of industry standards. At present, there are R3 blockchain alliances in the world, and blockchain alliances such as chinaledger and Gold Alliance have been established in China. Become the designer of smart contracts. The development of blockchain is inseparable from the underlying technology and the design of smart contracts. The bank reserves a large number of experts in settlement, financing and guarantee, and has an in-depth understanding of the industrial background, customer needs and transaction methods. In the future, it can become the designer of smart contracts and deeply participate in the division of labor of blockchain.
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