ModulTrade : Platform and an ecosystem that gives micro, small and medium enterprises
ModulTrade is a service, a platform and an ecosystem that gives micro, small and medium enterprises an opportunity to trade globally while delegating all related end-to-end trade hassle to ModulTrade and its partners at low costs. This will open them up to new business opportunities and partnerships, allow to increase sales and trade without borders. All that without serious investments and with little to no administrative hassle of international trade operations.
In order to ensure the portfolio of tools and services offered by ModulTrade and its partners provides high trust at comparatively low cost, ModulTrade is going to make heavy use of Distributed Ledger Technology (or blockchain) and Smart Contracts.
Distributed Ledger Technology will record all transactions on the platform in a reliable and immutable way and share information between involved counterparties. Smart contracts, which can be thought of as programmatic representations of real world contracts, will ensure trustworthy, independent and guaranteed execution of terms and conditions of the actual legal trade contracts that they will represent.
Micro, small and medium enterprises globally that currently do not have access to international trade market due to high entry barriers, capacity constraints or complete absence of suitable trade financing services. Traditionally, trade finance business has targeted exporters and importers of a certain size and in certain geographies, with only mid-range to larger players being able to afford trade finance services. In developed countries, the share of MSME exports in total exports in 2013 was 34 per cent. The equivalent share on the import side was 38 per cent. In developing countries the numbers are similar. There is clearly a big segment unserved or underserved by banks and other trade finance industry players globally. Clearly, this segment struggles to enjoy the opportunities that international trade could offer them.
Roughly $6.5 trl and over 400 mln MSMEs globally. It is approximate volume of trade that does not happen due to rejection of trade finance requests, lack of availability of or access to suitable and affordable trade finance options, complexity of options, administrative and monetary burden, lack of trust between counterparties, lack of trust between trade intermediators (banks), etc.
Global trade volume in 2015 - $18.5trl Share of MSME export/import, approximately - 35%. $18.5trl * 35% = $6.5 trl Over 50% of MSME trade finance requests are rejected, compared to only 7% for multinational corporations. About 68% of companies do not seek alternatives for rejected transactions, and have a lack of awareness about the types of trade finance products which exist on the market.
Modultrade’s Core Strengths
ModulTrade addresses the needs of small enterprises by eliminating the traditional barriers for entry to global trade. Problems like lack of trust, high entry costs and the overwhelming complexity of trade related operations are deftly and easily mitigated by the ModulTrade platform. ModulTrade connects micro, small and medium enterprises (MSMEs) to global trade through four main components: a blockchain based smart-contract platform, a trade-related services platform, a trade and reputation network, and of course marketplaces, where these smaller enterprises can connect and do business, quickly and efficiently.
Quite a staggering feat of strength, supporting such a teeming world of small enterprises! Until ModulTrade, there was nowhere for the +400 mln MSMEs to meet, commit trade agreements easily and trustfully and get help with trade-related services in a cost-effective way. Today, Blockchain technology can be used to build a user’s platform, adding a module of trust into the B2B trade cycle, simplifying the execution of transactions and decreasing costs. ModulTrade has laid the foundation for creating a value ecosystem for global trade: a digital blockchain networked value structure that is real-time, global, connected, digital and cost-effective, with features to support further fintech solutions developed by third parties.
At the core of any strong, smart and dependable platform is a team of professionals with those very qualities. The team at Modultrade includes those with extensive experience in the fields of international trade, technology, banking, EMEA financial services, IT solution development, decentralized systems, product design, marketing and information security. Team members garner their considerable experience from an impressive list of major institutions, including McKinsey&Company , Reuters, IBM, UNISYS, ING, Deutsche Bank, Crédit Agricole CIB, Société Générale, Banque de France and Sberbank. Advisors to the ModulTrade team include renowned experts in B2B e-commerce, capital management, trade finance, digital asset creation and multi-countries business development. Their collective experience include executive positions at Apple, HP, ICS (Institute of Chartered Shipbrokers), Citigroup, Deutsche Bank, Sony, GlaxoSmithKline, Nokia and Coca-Cola.
Another important core strength of ModulTrade is its compliance with regulations and strict adherence to applicable laws. Working with Ramparts European Law Firm, the ModulTrade team has chosen Gibraltar as the ideal jurisdiction for it’s Token Sale. Gibraltar was selected for its international reputation as rock solid to protect funds of both participants and Token Sale distributors. In addition to the jurisdiction’s progressive stance on cryptocurrency and its regulation (Gibraltar plans to regulate Distributable Ledger Technology as of 1 January 2018) ModulTrade has formed a special purpose vehicle for its token sale — The Token Sale Company (TSC) which will be the holder of the funds raised in pre-sale and Token sale.
Finally, at the foundation of every groundbreaking concept powered by a stellar team, is a workable, progressive plan for the project and a viable, working product. This is another critical core strength, with the team having already developed their minimum viable product (MVP), which is beginning to serve a solid global trade platform for MSMEs to perform transactions, at this moment in time. In order to use the platform, the Ethereum based ModulTrade token, MTRc, will soon be used to make transactions and exchanges.
The timeline for ModulTrade, from its original idea inception at MIT in October 2016, through its idea development and concept launch in April 2017, onto its white paper and MVP, to its projected widespread adoption in 2018–19, demonstrates that the progress has been well-planned and paced according to each milestone in its journey. The course of action is clearly set and on-track.
At the core of ModulTrade is the strength to lift the world of global trade to new heights of trust, speed and efficiency through its blockchain based platform. To democratize global trade for all.
ModulTrade’s pilot market segments and geographies
ModulTrade’s pilot geographies are Germany, UK and Italy, as these countries combined have the largest number of MSMEs in Europe. ModulTrade’s pilot segment will be construction, as it has the largest proportion of MSMEs compared to other segments, it involves extremely high volume of cross border trade and is highly interconnected with global supply chains.
Germany. The largest economy in Europe and the 4th largest by nominal GDP in the world. Has the highest trade surplus in the world (US$ 310 bln in 2016) and is the 3rd largest exporter in the world (US$ 1,21 trl in 2016). 99% of SMEs are family-owned. UK. The 5th largest economy in the world by nominal GDP, the 10th largest exporter in the world (US$ 674 bln in 2016). Italy. The 3rd largest economy in Europe and the 8th largest by nominal GDP in the world. The 8th largest exporter in the world (US$ 514 Bn in 2016).
ModulTrade joins One Belt One Road
In light of the “One Belt One Road” initiative of Chinese People’s Republic that is expected to bridge the ‘infrastructure gap’ to accelerate economic growth across the Asia Pacific area and Central and Eastern Europe, it’s extremely important to develop the regions into a cohesive economic area through building infrastructure, increasing cultural exchanges, and broadening trade routes. Anticipated cumulative investment over an indefinite time scale is estimated at US$4 trillion or US$8 trillion.
As far as economic ties and trade expansion go, the lion share is devoted to small and medium enterprises who are undeniably the backbone of the economic growth in the world.
In support of bridging said infrastructure gap, ModulTrade have found themselves in a unique position by providing a means of developing the economic growth in China, as the company has a great focus supporting the abundant Chinese small and medium enterprises who are seeking global opportunities to expand and explore the untapped potential of cross border trade.
But how is this pioneering company doing this? ModulTrade has created a new digital trade hub, the ModulTrade Platform (MTP), built on blockchain technology and applying smart-contracts to replicate the traditional trade processes such as letters of credit and bank guarantees, but at a much lesser cost to the user and with increased trust between the buyer and seller.
The MTP serves users with easy to use tools to successfully complete a trade cycle between countries. In addition to the existing functionalities, ModulTrade has taken steps to further make the MTP catered to small and medium enterprises specifically in China, by developing the webpage and product interface in the Chinese language and integrating China Post and S.F. Express as a 3rd party service provider for delivery of the goods.
With its global ambition, ModulTrade has impacted the entire eCommerce industry as it has supported the first batch of goods sold from China on the blockchain via the MTP in early December, with payment made entirely in cryptocurrency (ETH). As stipulated in the smart-contract by the transaction counterparties, the goods were prepared for dispatch and securely shipped cross-border by local delivery company China Post, and delivered to the buyer by Russian post in Moscow, Russia. The carrier carefully inspected and packed the goods for the shipment. The buyer received the parcel at their doorstep in a weeks’ time and was absolutely satisfied with the quality of the goods, the delivery service and the ease of executing the trade on the MTP. Right after the parcel receipt, the correspondent amount in ETH automatically transferred via the smart-contract and hit the wallet of Chinese seller immediately. As a result of executing trade on the MTP, both parties saved considerable time and a significant amount of money.
As one of the core ambitions of ModulTrade is to allow micro, small and medium enterprises to trade with ease from anywhere in the world, coupled with the success of the first trade from China on the blockchain, we can proudly declare that our platform connects the continents and addresses the needs for global trade participation. And we’re more than happy to welcome all businesses and enterprises to join us in this revolutionary journey of changing the Trade Finance industry for the better.
ModulTrade community keeps on growing
Since we launched in October, we have seen the community across our social media channels grow and grow, and we want to personally thank everyone who is supporting our project.
ModulTrade aims to democratize trade for MSMEs (micro, small and medium enterprises) around the world, and the following we have received from individuals in Russia, the Middle East, Asia and Europe, speaks of our global mission.
We have a loyal group of 1800 fans on Facebook and 563 followers on twitter. Our telegram community has reached a staggering 1,925 individuals and we have seen great success on BitcoinTalk, with positive conversation threads reaching 56 pages, 1,116 replies and a total of 11,176 views, to date.
As we continue to develop and expand the ModulTrade product, we hope to see our community grow too, alongside the amount of interest and support from all involved.
What is MTRc?
MTRc is a crypto token issued by ModulTrade which enables its users to connect to the ModulTrade platform and its ecosystem, to make transactions, and to pay fees for the services consumed. In order to ensure the portfolio of tools and services offered by ModulTrade and its partners provides high trust at comparatively low cost without reliance on expensive and inflexible established trade intermediators (banks), ModulTrade is going to make heavy use of blockchain technology.
Trade counterparties may be unwilling to trade in MTRc or ETH because they do not want to take exchange rate risks. How do you plan to address this issue?
ModulTrade or its partners can provide short-term escrow service to trade counterparties. In such a case, a trade face value will be paid in fiat currency to an escrow provider, while ecosystem and service commission will be paid with MTRc tokens.
A buyer will transfer the trade face value in fiat currency to the dedicated escrow account. Escrow provider will allocate trust collateral in MTRc tokens to the smart contract. The amount of the trust collateral will be sufficient to account for potential MTRc price volatility during the trade period. When trade is complete, escrow provider will transfer the trade face value in fiat currency to the seller. In the unlikely event that this does not happen, MTRc tokens from the trust deposit will be used to automatically pay the trade face value to the seller. In case of a dispute, ModulTrade will play the role of an arbiter to decide which party is to receive which portion of the trust collateral.. The trade and service commissions will be paid in MTRc tokens to ensure ecosystem and transaction efficiency.
Obviously, this type of transaction is not as efficient and cheap as a purely crypto token transaction. However, it proves to be a great compromise until MTRc gains wider acceptance.
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- Maiyah
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