One of the most auspicious industries that use Blockchain technology is trade finance. Some of the leading banks all over the world are investing heavily in research and development. Experts have discovered new uses of Blockchain technology. Since 2016, R3 has been executing various pilot runs in the market that complement their research. Any reputable Blockchain services company keep on improving their strategies until the products fully get into the market.
There are several potential uses of Blockchain technology. In this article, we will look at the relationship between Blockchain technology companies and trade finance. You can learn how this this technology contributes to the other industries by reading broadly on this topic.
Monitor Real-Time Condition and Status
CBS is among the R3’s members that has contributed greatly to Blockchain technology research. Lately, the company has been carrying out 3 different projects to analyse the use of Blockchain. The brand has been running out a trial project with cotton exporters. The company placers a humidity monitor in a canister and link it to IoT and GPS. The monitor enables customers to track their shipments on a real time basis. Besides, they will analyse the condition of their products as they travel through. Other Blockchain technology companies have been running pilots like the ones in this study. However, some of them are using different products to carry out the same research.
Elimination of Unpaid Settlements
Most grain farmers have a problem with financial losses because of trade insolvencies. In 2014, close to $50 million was lost in 2014 as a result of this activity. It can take a farmer 4 – 6 weeks to get payments for their shipment. Due to this, you will get conflicts arising between buyers and farmers over complications in payments. Some of these problems are making late payments or failing to pay the right amounts.
Some start-ups have decided to take these matters in their hands. These farmers have Blockchain platforms that allow farmers to get automatic payments after delivering their grains. These innovations significantly reduce the disputes between buyers and farmers. Once a full-profile application is fully functional within a domestic setting, you will find them expanding on external trade.
The utilization of Blockchain technology also reduces financial risk and loss. On further development, the system will be able to digitalize legal and sales arrangements. The trade finance industry is unwieldy wide and relies heavily on contracts and settlements. Most of these agreements currently operate on paper copies which is old-fashioned.
Blockchain technology will eliminate the need for the paper-based system. In return, it will reduce the risk of financial losses because employees can tarnish, mishandle, or loose the documents. You can trace electronic documentation in a more efficient way. It also eliminates the requirement for third-party verification systems.
Do You Have an Interest of Learning More About Blockchain Companies?
Blockchain technology creates a high level of transparency in financial trade between sellers and buyers. From the time of placing the order to making a payment, Blockchain technology will simplify the trade process. If you want to invest in international trade, Blockchain technology can add a lot of value to your efforts. The most important thing is to learn how this technology can benefit your business plan.