Major Banks Buy Into Blockchain-Based Trade Finance Allowing SMEs To Profit

Major Banks Buy Into Blockchain-Based Trade Finance Allowing SMEs To Profit

 

Everyday produce from around the world is shipped and moved to the far corners of the globe for customers to buy with such ease that little thought is given to the inner workings of this trade industry. From French Champagne being purchased off the shelf in Spanish supermarkets to German Sausages available at the corner store in the United Kingdom; it has become a way of life.

However, global trade and exportation of such good is an intricate, complex, and often difficult task that hinges on financing; trade financing. Trade financing, much like many forms of credit providing, is a key component of the success of small to medium enterprises (SME), but that key is not always easy to obtain.

Trade finance transactions were worth over $9 trillion in 2017, but the industry is heavily paper-based and follows processes and procedures that have changed little in decades or even centuries.

For many SMEs, the financing of these trade deals has been primarily reserved for big companies, but that is changing, and it is changing thanks to the emerging technology of blockchain.

Traditionally, SMEs seeking credit for their endeavours, including, but not limited to, trade deals and exportation, relied on a linear relationship with a major bank. However, there is a change in the air that is being driven by enterprises the likes of IBM, as well as some of major banks who are buying in.

Big Banks building a trade finance blockchain network in Europe

Europe is an interesting case study of trade […]