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One of the industries most suited for blockchain technology is trade finance. Many of the world’s largest banks are investing time in its research and development.
Thanks to a consortium of 71 global financial leaders, R3CEV, much has been uncovered about the potential uses of blockchain technology.
Since 2016, R3 has executed several pilot runs in the market to complement its research. They will continue to refine these strategies until they are ready to fully enter the market.
So, what are some of their findings of potential use? Here is the future of trade finance with blockchain technology companies.
Monitor real-time status and status
CBA, one of the members of R3, is a leading contributor to the research of blockchain technology. Currently, they are undergoing 3 different projects to analyze the use of blockchain.
They are conducting trials with exporters carrying cotton. A moisture monitor is placed inside the canister, which is connected to IoT and GPS.
This monitor allows consumers to track their shipments with real-time status. Plus, they are able to evaluate the condition of their product as it travels.
Other national blockchain technology companies are running pilots similar to this study. Halocent is conducting similar trials in Singapore. However, they are looking into importing French wines.
eliminate unpaid settlements
A growing issue for grain farmers is the financial loss due to business bankruptcy. This activity caused an estimated $50 million in damage in 2014.
It takes about 4-6 weeks for a farmer to receive payment for his shipment. At that time, many times disputes arise between farmers and buyers over payment complications (failure to pay due amount, late payment, etc.).
Australian start-up, Full Profile, has taken matters into its own hands.
Their blockchain platform now allows farmers to receive automatic payments upon delivery of grain. This will significantly reduce the risk of dispute between farmers and buyers.
Once Full Profile’s application is fully functional in a domestic setting, they will expand on external business.
digitize
The use of blockchain technology can also be beneficial in reducing financial loss and risk. Upon further development, it will be able to digitize sales and legal systems.
Trade finance is a cumbersome industry, relying heavily on settlements and contracts. Currently, most of these agreements are handled the old fashioned way: paper copies.
Blockchain technology will eliminate the need for this paper-based system. This ultimately reduces the risk of financial loss as documents are often lost, misplaced or mutilated.
Electronic documentation can be tracked more efficiently. Plus, it reduces the need for third-party verification systems.
Interested in learning more about blockchain technology companies?
Blockchain technology creates transparency in financial trading between buyers and sellers. From the time of payment to the time of payment, blockchain has been able to simplify the business process.
Are you looking to jump into the world of international business? You are at right place. Would be great to know your thoughts and comments.
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