Why Envoy has introduced blockchain to trade finance

Though most well-known for supporting cryptocurrencies like Bitcoin that have seemingly little use in the real world, blockchain is in fact set to upend the status quo in any number of unsuspecting industries, from human resources to entertainment outlets like gaming. The same can be said in the field of trade finance, and that’s where Envoy comes in.

Envoy has created a blockchain-based marketplace to connect buyers and sellers to the financiers that fund their transactions, thereby putting all parties at far less risk of financial loss. The potential implications of such a venture are difficult to understate. But why? What does blockchain bring to trade finance?

Leave the paper for origami

One of the most obvious, but also most consequential benefit of blockchain is that it finally offers a way to eliminate the vast amounts of paper that still weigh down trade finance. Too many businesses and investors today remain dependent on paper and rubber stamps to keep files like bills of lading, letters of credit and title papers and perform the transactions that are necessary in trade finance.

Blockchain digitises everything, finally giving these operations a route of escape from such antiquated practices while ensuring complete security and reliability. These have been a big concern for many of those who’ve remained attached to low-tech methods of doing business, but that’s no longer necessary.

Other blockchain benefits

Besides offering a path to digitisation, blockchain’s inherent qualities of security and decentralisation bring a new level of transparency for financiers while reducing regulatory and reputational risks.

Blockchain’s unique specialty of storing information across countless sources keeps that information secure and unalterable. This creates a transparent supply chain that allows financiers to track cash flows and ensure that the funds they provide won’t end up in the wrong hands like war criminals or those carrying out poor labor practices. This is equally a boom for regulators who can use a system like Envoy’s to follow the money with ease.

How Envoy uses the blockchain

While any kind of blockchain utilisation would include the benefits listed above, Envoy is employing the technology in a few unique ways as well, adapting it to fill the gaps and make up for the inefficiencies in the trade finance industry.

While Envoy’s token (NVOY) is hosted on a ERC20-based blockchain like many others, Envoy has chosen to make theirs a private blockchain, which overcomes deficiencies like low processing speed. This also boosts security by keeping potentially bad actors out of the system and makes the rules easily modifiable to adapt to changing conditions.

Envoy is also using the power of blockchain to see to it that multiple financiers have the ability to fund the same contracts. While financiers ease the risk to buyers and sellers, Envoy reduces the risk to financiers by giving them a system that distributes that risk between themselves. This also benefits lower tier companies with short or poor credit histories or simply lacking in the banking connections that large, well-established traders maintain. It’s notoriously difficult for these companies to get their trades funded, but with Envoy’s system of distributed risk, there’s no reason for that to persist.

Blockchain is the technology of the future for many industries. For Envoy and trade finance, blockchain is the technology of now.

For more information VISIT Our website and JOIN our Telegram!