See how "blockchain" can finance foreign trade companies

Xinhua News Agency, Beijing, November 14th: See how "blockchain" can finance foreign trade companies

Blockchain is one of the most fashionable technology terms at the moment. In recent years, Various financial institutions have invested heavily in blockchain technology, and financial authorities are also actively studying the application of blockchain technology.

In March 2019, the State Administration of Foreign Exchange launched a cross-border financial blockchain service platform to integrate blockchain technology with cross-border financial services and gradually cultivate a cross-border credit service system in the foreign exchange field.

Although my country is the world's largest exporter, small and medium-sized enterprises account for the majority in the foreign trade industry. For them, corporate credit credibility is insufficient, it is difficult to obtain financing, and the financing efficiency is Low and long cycle.

At the same time, there are also bottlenecks in how to provide financial services to these small and medium-sized enterprises engaged in foreign trade. "Banks lack effective and convenient channels for verifying the authenticity of trade financing backgrounds, and the information between banks is fragmented, which is prone to duplicate financing or excess financing problems." said a relevant person in charge of a local branch of a large state-owned bank.

Cracking credit risks caused by information asymmetry is precisely the specialty of blockchain technology. Blockchain is a distributed shared ledger and database, which is characterized by "honesty" and "transparency". The rich application scenarios of blockchain are basically based on the fact that blockchain can solve the problem of information asymmetry and achieve collaborative trust and consistent action among multiple subjects.

“We have established a cross-border financial service platform for information exchange and effective verification between foreign exchange, taxation, banking and other departments as well as relevant market entities to realize various information such as fund receipt and payment, pledge certificates* **Shared collaboration." said the relevant person in charge of the State Administration of Foreign Exchange.

From the data point of view, after the cross-border financial blockchain service platform further expanded the pilot scope to the whole country in June 2020, as of October 31, 2020, more than 270 corporate banks have voluntarily participated. The number of service entrepreneurs exceeds 5,100, of which 75% are small and medium-sized enterprises. The platform has completed a cumulative financing loan amount equivalent to US$52.69 billion, and the number of financing loans exceeded 62,000.

The person in charge of a local company engaged in foreign trade lighting in Zhejiang said that blockchain allows companies to "subtract" and no longer need to provide capital flow and annual customs declaration totals as proof, saving manpower and money for the company. time.

In Chongqing, on average, nearly 66 pieces of export information need to be verified for each financing business, and the most complex one even involves 1,138 pieces. After using the cross-border financial blockchain service platform, the document verification time has been reduced from 0.5 to 2 working days reduced to 20 minutes.

After the outbreak of the new coronavirus pneumonia, this "air route" that facilitates foreign trade companies to enjoy financial services has provided strong support for companies to carry out normal business due to "contactless" processing.

“During the COVID-19 epidemic, we applied for an export invoice financing of more than 2 million US dollars, involving nearly 80 trade documents. Unexpectedly, the bank provided the loan within 2 hours. The bank used the blockchain platform to The customs order verification was completed in 2 minutes using the batch verification function,” said the person in charge of a coastal foreign trade company with emotion.

According to data from the State Administration of Foreign Exchange, since the outbreak of the COVID-19 epidemic, the financing and lending amount of cross-border financial blockchain service platforms has reached US$36.398 billion, accounting for approximately 69% of the financing amount since the pilot.

Experts believe that the COVID-19 epidemic has had a great impact on the foreign trade industry, and the financing needs of enterprises have become more intense. In a "contactless" environment, the function and value of online financial services have been amplified .

The cross-border financial blockchain service platform is deeply integrated with the bank’s own business, which also helps bank business optimization and innovation. For example, Bank of Ningbo relies on information such as import and export scale provided by the blockchain platform to launch pure credit financing products, which are mortgage-free, fully online, with online application and automatic approval, and can be credited in as fast as 10 minutes.

"In the future, we will continue to expand the application scenarios of the platform based on the actual needs of enterprises and banks to further facilitate enterprises, banks and other market entities to handle cross-border trade, investment and financing businesses." said the relevant person in charge of the Foreign Exchange Administration.