Blockchain builds machine trust, can trade finance break the game?

With the continuous growth of global trade volume and the rapid development of the trade financing market, pain points have gradually emerged. Problems such as high verification costs, incomplete financing information, false financing, repeated financing, and difficult supervision have become prominent, and corporate financing costs have increased significantly. . In this context, with the characteristics of openness, transparency and traceability, the application of blockchain technology has become a good medicine to solve the sickness of the trade financing industry. With the help of policies, it has risen to a new height.

On June 9, Beijing issued Several Opinions on Accelerating the Cultivation and Growth of New Business Models and New Models to Promote the High-quality Development of Beijings Economy and five action plans. The plan proposes that in terms of blockchain, leading enterprises and backbone enterprises of blockchain technology will be cultivated to form a highland for RD innovation and industrial application. Build a list of key blockchain enterprises in Beijing, do a good job in service and technology promotion, and explore the use of blockchain technology to improve industry data transactions, regulatory security, and integrated application effects. In addition, in combination with the construction of the free trade pilot zone, it will support the development of e-commerce, electronic transactions and blockchain applications for cross-border digital trade, and improve the security and credibility of various transactions and data circulation.

What are the specific pain points of trade finance? How can blockchain technology break through? Aiming at the application logic of blockchain in trade financing, Wanglian Technology in this article summarizes and explores, hoping to give the industry more room for thinking in the future.

Since domestic commercial banks started their international trade financing business, they have mainly focused on traditional trade financing business, including import L/C issuance, import letter of credit billing, packaged loans, and delivery guarantees.

In the traditional trade financing mode, there are often two major problems, namely, the determination of the authenticity of trade and the determination of whether to repeat financing. On the one hand, since each financial institution conducts business independently, the trade item involves logistics, capital flow, and information flow, and its transaction chain is long and involves a wide range. The existing processing process mainly relies on the operation of offline paper documents, and Too much manual intervention, low operating efficiency and high operational risk.

On the other hand, due to the non-sharing and asymmetry of information among various financial institutions, problems such as high verification costs, incomplete financing information, repeated financing, and difficult supervision are common in cross-border business trade financing. above financing costs.

Trade financing generally has the characteristic that the single amount is small, but the total number of transactions is large. In addition, trade financing is self-compensating. Every transaction must be strictly verified. Investigation, under the item of trade in goods, it is necessary to know the market situation, transportation situation, storage situation, etc., making many procedures, long process, and complicated handling a significant problem in trade financing. If there is a problem with one or two transactions, the business unit will be busy for nothing for a year.

In addition, when banks handle trade financing business for customers, the collection, verification, on-site inspection and supervision of intelligence information such as customer situation, trade background understanding, business risk control, and post-loan management after business processing is completed However, the trade itself involves a wide range of industries, long transaction chains, and various settlement methods. The business management and risk control of various trade financing are arranged and implemented in terms of rules and regulations, but it is difficult in actual manual operations.

However, the emergence of blockchain technology is expected to solve many of the above problems, and machine trust is far superior to manual trust.

As the underlying technology of Bitcoin, the blockchain has attracted much attention since its inception. After more than ten years of development, there are many practical practices in logistics, finance, credit investigation, cross-border payment and other fields, and it has gradually developed into A good medicine to solve the pain points of more and more traditional industries.

Aiming at the cumbersome trade financing process, through the immutable feature of blockchain data, the entire business process of the enterprise from submitting financing application, financing acceptance, financing review, loan registration to repayment registration is managed on the platform, and the The information of the core document export declaration form in export trade financing is checked through the blockchain system to verify the authenticity of the document, automatically calculate the financing balance of the corresponding customs declaration form, and prevent repeated financing and excess financing while greatly improving Financing efficiency, the completion time of a traditional import and export financing is even shortened from 1 to 2 days to 15 minutes.

In addition, blockchain can also provide regulators with more convenient and comprehensive management support. Using the consortium chain, the business participant information and business content information can only be seen by the counterparty and the supervisor, and the penetrating and real-time supervision method realized by the blockchain sharing mechanism will also have real-time information synchronization, transaction parties The feature of not needing to report proactively saves manpower and time costs, and at the same time, it is more convenient for the review and inspection of the regulator.

Through digital encryption, point-to-point communication, distributed consensus and other technologies, the blockchain connects all aspects of trade with a credible bond, and the information on the chain becomes open, transparent and traceable, so that both parties to the trade and intermediate participants can be authentic Quickly exchange and obtain information, and at the same time, use the tool of smart contracts to promote the rapid execution of transactions.

The introduction of blockchain has two tangible benefits for trade finance. First of all, the system supported by blockchain technology can systematically collect information from all parties, making the originally scattered information centralized and comprehensive, which is conducive to banks to quickly and accurately verify and compare information, and improve the authenticity of trade background. Grasp, Reduce the moral hazard of artificial fraud, and make false financing and repeated financing self-defeating.

epilogue

Although the imagination is rich enough, it is not a matter of one day to implement it into practice, and it still needs time and experience. In addition, the lack of talents is also one of the reasons that hinder the implementation of blockchain in the field of trade financing. Considering that blockchain itself is not suitable for storing a large amount of information, careful design is required when data is uploaded to the chain, so as to ensure that key and effective Valuable data is stored on the chain, which requires designers to have very rich experience in business processing and familiarity with the entire transaction process of the entire product. Despite the difficulties, it is believed that under the encouragement of policies, the blockchain will be expected to reach a new level in the field of trade finance.

At present, the export trade financing business scenario includes export bill transfer, export bill discounting, international trade order financing, export document pledge loan, export commercial invoice financing, etc., and will expand related functions in import trade financing according to the overall progress of SAFE. The breadth of the trade finance market is evident.

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