Extract
[...] When these problems are resolved, the BCL could provide enormous economic, social, and political benefits to society. The blockchain technology, although still young and facing technical, commercial, and regulatory challenges, has the potential to change many aspects of the financial services sector and the economy at large. New ways of intermediating capital and risk are emerging, providing a catalyst for changing existing financial sector businesses. These technologies could improve the automatic functioning of organizations and expand the scope ofaccfinancial. However, despite the social and technical infrastructure behind this technology, it remains still underdevelopede. [...]
[...] International trade financing has remained for many years very manual, paper consumer. However, the adoption of blockchain technology allows to revolutionize and digitalize trade finance. In fact, it is a digital solution that is easy to use to develop trade finance. The blockchain simplifies and accelerates complex procedures of international trade financing that crosses numerous value chains, characterized by hundreds of millions of documents exchanged per year, over ten million customs declarations, and on average a dozen of intervenants per operation. [...]
[...] It uses the TIX platform, provided by TradeIX which uses R3 Corda. The first transactions began in 2018. The consortium brings together ten banks (Bangkok Bank, BNP Paribas, DNB, Commerzbank, ING, Natixis, NatWest, OP Financial Group, Standard Chartered and SMBC). We.Trade was launched in April 2018 and constitutes a major innovation in European intra-European trade financing, and in particular for European SMEs as it involves a consortium of 13 European banks39 in 14 countries (Germany, Austria, Belgium, Denmark, Spain, France, Greece, Italy, Luxembourg, Norway, Netherlands, United Kingdom, Sweden and Switzerland). [...]
[...] It reprpresent less than of intra-EuropeanThe Open of the'International, 201919). In addition, it presents many limitations, such as its high cost, a heavy and complex operation processing, (iii) many paper documents, a longer processing time than the transportation time of goods. In these conditions, the part of the global trade using documentary credit has gone from 50% in the 70s to 15% today. A large part of this volume has shifted to commercial transfers, in which goods are transported and delivered before payment is made, always within 30 to 60 days. [...]
[...] Threats In addition to the legislative headache that can complicate the blockchain, it appears that despite the launch of international consortia, the adoption of platforms remains limited due to the current international trade ecosystem that is too fragmented and characterized by multiple counterparties. It is now important for international trade actors to agree on networks with common standards and rules. In fact, the danger for all these developing platforms is that each one tries to do something different. It is essential to avoid a fragmentation of trade finance by blockchain that would then limit the benefits of the commercial ecosystem and prevent widespread adoption. [...]
