XINFIN - A BLOCKCHAIN GLOBAL TRADE PLATFORM
Global or international trade, is simply a display of the power of financial transactions to import or export goods and services across international boundaries. Global trade can also enable larger economy with vast recognition at local level, one can attend to their strong points in terms of quality and cost and save money by importing just what cannot be produced more efficiently in their own region aiding development and helping reduce poverty around the world.
The World Health Organization reports that $3.5 Trillion by 2025 will be needed for infrastructure investments, ensuring access to drinking water, sanitation and electricity.
FINANCE
In order to aid a huge infrastructure growth, financial institutes and banks should invest in the ecosystem, which is trade finance. However, after financial crisis faced and global meltdown there is less trust and more risk, as a result deserving businesses and individuals are either denied access to trade finance or delayed due to increased regulatory and compliance limitations of traditional financing systems.
A 2017 survey by the Asian Development Bank (ADB) revealed that the gap in global trade finance in the range of $1.6 Trillion annually. There has been innovations in Fintech and Supply Chain to disrupt current systems and to remove major inefficiencies existing today.
SHORTFALLS IN TRADE AND FINANCE
There are several global infrastructure development problems. And this is due to disunited systems, multiple intermediaries and an inherent need to exsercise a world of trust between commercial parties.
• Nature of infrastructure investments
Infrastructure projects often face funding challenges This limits private investments leading to governments often borrowing at high cost of capital, leading to an increase in tax which burdens the citizens.
• Limitations of traditional providers
Banks often face capacity challenges constrained by balance sheets and regulatory requirements (AML, KYC, sanctions, Basel etc.), Trade financing is particularly pressured by increasing costs on one side due to compliance requirements and increasing commoditization and price bottoming on the other side.
• Lack of a truly global financial Marketplace.
What is missing is a global market place where financiers can finance projects anywhere in the globe thus increasing competition.
• Cross-border latencies.
Cross-border agreements is still a challenge for merchants or beneficiaries from acquiring global business opportunities. There are lots of processes involed in payment infrastructure, which delays payment confirmation.
• Legacy issues.
Trade and finance suffers from multiple web of legacy systems and delays due to the cumbersome processes involved in traditional means. The world economy stands to benefit as a whole if we are able to provide an innovative financing mechanism that can overcome these inefficiencies and complement the existing financial systems.
Blockchain opened a wide array of possibilities in the financial world (where anybody can make a transaction with anybody around the globe, thereby eradicating all barriers to banking). Of course, it is yet only a dream! ‘Ethereum’ which was proposed in late 2013, added an open and distributed blockchain, the notion of smart contracts facilitated by a complete programming language to the public.
REWARDS OF BLOCKCHAIN OVER TRADITIONAL SYSTEM
• Digitized ledger
Blockchain aids storing digital records since its mainly a distributed database. So, any financing, trade or any other industry business process can be digitally recorded on the blockchain.
• Decentralisation & Dis-intermediation
Decentralisation can reduce the dependencies on intermediaries or single authorities.
Financiers, buyers and suppliers can transact with each other with blockchain and smart contracts there by gaining significant efficiencies.
• Immutability & Auditability
Blockchain is secured by advanced cryptography and any change to the records requires some form of consensus from the entire network. This provides an in-editable audit trail for all kinds of financial and non-financial assets and transactions that are recorded on the blockchain.
• Efficiency improvement
Most of the complex processes that are involved in trade and finance today can be re-engineered using smart contracts over blockchain, thereby building efficiency in the system.
APPLICATIONS OF BLOCKCHAIN IN TRADE CONTRACTS
• Digital contracts.
• Facilitating cross-border transaction.
• Real-time payments and settlement.
• Asset Digitisation
PARTICIPANTS REWARDS
All the three core participants on the TradeFinex platform stand to gain from their participation. The benefits can accrue in qualitative as well as quantitative terms and quantum depends on the maturity of the existing business processes
BENEFICIARIES GAIN
While establishing the project if the Beneficiary uses TradeFinex platform then following advantages improves the IRR of project
• Lower Cost of Capital.
• Access to Global pool of funds.
• Access to credible suppliers and financiers.
• Participant incentives.
SUPPLIERS BENEFITS
Suppliers also can engage in trade with Beneficiary through TradeFinex platform which leads to improved margin in their supplies due to following advantages:
• Expand market for Goods and services.
• Improved Trade and cost efficiencies
• Participant Incentives.
FINANCIERS REWARDS
Financiers engaging with Beneficiary through TradeFinex platform gains better return on their investments due to following advantages:
• Find global investment opportunities.
• Real-time Payment and Settlement.
• Real-time Investment tracking.
• Participant Incentives for Lowering Cost of Capital.
• Hedge against the Forex volatility.
CONCLUSION
XinFin blockchain protocol is geared up to offer an innovative financing mechanism to the annual $3.7 Trillion infrastructure financing market and annual $1.6 Trillion of trade financing deficit. Through TradeFinex platform rollout, the idea is to leverage the features of blockchain platform to connect the Financiers and Suppliers with the beneficiaries, in a secure environment thereby allowing them to transact trade and finances against certain secured digital assets, XDC.
XinFin offers futuristic solution through its proprietary XDC01 protocol which combines best of private and public blockchain network By understanding the existing issues linked to public blockchain.
FOR MORE UPDATES AND INFORMATION ON XINFIN, PLEASE CHECK OUT THE FOLLOWING LINKS
Website: https://xinfin.org
Telegram: https://t.me/xinfin
Medium: https://medium.com/xinfin
Twitter: https://twitter.com/XinFin_Official
LinkedIn: https://www.linkedin.com/company/xinfin/
Youtube: https://www.youtube.com/channel/UCQaL6FixEQ80RJC0B2egX6g
Github: https://github.com/xinfinorg
Author: Nsiman
Eth address: 0x1714ea3Cce6E6B8680eeaB0EB03e51b6C4E2797e