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Top Chinese chemical firm uses blockchain to cut trade financing costs

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One of China’s largest chemical producers has launched a new Blockchain Warehouse Receipt Platform to help the industry combat the rising costs of operations and trade financing.

An increased demand for more environmental and safety measures amid the pandemic has further driven costs up in China’s petrochemical trade. Small enterprises were already struggling to meet the credit conditions of financial lenders, as a lack of effective risk control and difficulties in securely tracking transaction processes of bulk commodities have led financial institutions to tighten lending on warehouse financing.

Major players in China’s petrochemical trade have now applied blockchain technology to address weak points in the logistics cycle and alleviate the high financing costs and delays that many enterprises are faced with. 

China’s first-ever digital warehouse receipt pledge financing transaction was completed on Sept. 27 using a system that integrates blockchain with Internet of Things technology. The transaction involved state-owned petrochemical giant Sinochem Energy High-Tech, China Construction Bank Inner Mongolia Branch, and Nanchu Management Group. The financing party is one of northern China’s largest traders in the lubricant and base oil industries, Beijing Longrunkaida PEC Products.

“From the application for issuance of warehouse receipts to the bank’s appropriation of the loan, it took less than one day with a cost 40% lower than that of common trade finance services in the market,” according to Sinochem.

The system offers a solution for risks such as fraudulent warehouse receipts, forged delivery documents, unclear property in goods, repeated pledges, impairment or loss of collateral — all of which frequently lead to frequent disputes on goods property and warehouse receipt finance.

Sinochem vice president Sun Liming explained how blockchain and IoT technology are being used to tackle these financial “pain points” in the petrochemical supply chain:

“The [blockchain] Platform is the first to realize strict correspondence between digital warehouse receipts and stored goods. It uses IoT technology to monitor the goods under digital warehouse receipts closely, to ensure that each warehouse receipt directly assures the existence of goods. In addition, the platform realizes swift goods delivery, receipt pledge, as well as integration of ‘four flows’ (the receipt flow, capital flow, contract flow, and goods flow).” 

Liming expects that the high security of blockchain technology, which is resistant to tampering, as well as the improved traceability of data in the supply chain, will “greatly improve the industry’s credit rating.”

The development and use of the new blockchain platform addresses the requirements recently laid out by eight Chinese ministries and commissions, including the People’s Bank of China and the Ministry of Industry and Information Technology. 

These ministries tasked financial institutions and enterprises with improving their data sharing, digitizing supply chain financing settlements, and standardizing supply chain inventories and warehouse receipts. All these measures aim to improve risk protections for supply chain finance and to reduce financing difficulties, operating and capital costs for supply chain firms.

A recent Cointelegraph report has delved into China’s application of blockchain technology to digitize its infrastructure and encourage secure data sharing, with the aim of increasing efficiency and establishing better credit systems across various sectors, including the IoT, supply chain management and government services.



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17M Chinese tourists verify health using blockchain to visit Macau

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Chinese non-profit blockchain consortium FISCO BCOS, reports that blockchain-based health records have successfully enabled China to resume mainland tourism to Macau.

From May, Macau’s blockchain-powered medical data system has recognized the ID codes of the Guangdong health system of the mainland, allowing mainland Chinese tourists to verify their health status using the DLT-powered system when entering the autonomous region.

To date, more than 17 million tourists have cleared customs between Macau and China’s mainland using Macau’s blockchain health code. The announcement boasts that it takes just 100 seconds for mainland Chinese to generate a Guangdong health code for the first time, and roughly three seconds for future health verification when traveling through customs:

“The establishment of Macau blockchain health code and the mutual recognition mechanism with Guangdong health code greatly improves the efficiency and accuracy of information verification across borders. It proves to be an effective solution to bring travel between Chinese mainland and Macau back to normal.”

The system encrypts medical data to the FISCO BCOS consortium blockchain, which is immutably signed by issuing authorities. WeChat’s ‘WeIdentity’ solution is used to transfer data between Macau and Guangdong in adherence to Macau’s data protection regulations.

Macau’s health code system was introduced in response to the coronavirus pandemic, which saw the territory suspend travel from mainland China in January.

The blockchain-powered “digital health passport” was developed by the Singaporean government-owned investment firm SGInnovate and local startup Accredify. The firms began working on the system in May to increase the efficiency of workflows among medical workers fighting the pandemic.

At the end of September, it was announced that the system had been used to verify coronavirus discharge records more than 1.5 million times.

Last week, local media revealed that the Chinese island province of Hainan is also seeking to trial a blockchain-powered rewards program to boost tourism as China’s economy reopens. Hainan was selected last year to host a regulatory sandbox for blockchain innovation.



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Nine Chilean cargo shipping companies approved to develop joint blockchain platform

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Chile’s National Economic Prosecutor’s Office, or FNE, has granted approval to nine national freight maritime cargo companies to establish a joint venture to develop a blockchain platform, the first of its kind in the region.

According to MundoMaritimo.cl, the platform will be named Global Shipping Business Network, or GSBN. It aims to handle all the processes related to maritime cargo such as document issuance and cargo clearance, among other services.

The solution is also expected to be offered to other companies in the industry and not just those involved in its development. As per the resolution issued by the FNE, CMA CGM, Cosco Shipping Lines, Cosco Shipping Ports, SIPG, Hapag-Lloyd, Hutchison Ports, OOCL, PSA, and Qingdao Port will be in charge of the GSBN’s development. The budget for the blockchain platform’s development was not disclosed.

Commercially sensitive information is not expected to be transferred through the GSBN blockchain platform, and Cointelegraph Spanish reported this meant it was possible to rule out the concern the use of the GSBN platform could facilitate “coordination” between the Shipping Constituents.

The project has been presented to the competition agencies of the United States, South Korea, Poland, and Ukraine, but there are no reports about their opinions about the platform as of press time.

Companies involved in the project were advised by Philippi Prietocarrizosa Ferrero DU & Uría (PPU) which is led by the Free Competition partner Ignacio Larraín together with the associates Álvaro Espinosa, Gabriel Budnik, and Matías Palma, who are well-known players in the local’s cargo industry.

Recently, the Port of Rotterdam in the Netherlands launched a blockchain-based pilot with some of the world’s leading shipping companies to improve the safety and efficiency of millions of containers that are unloaded in the port every year.



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Peer-to-peer NFT sales surge as average purchase price increases 7X

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Non-fungible tokens and digital collectibles have been selling like hotcakes over the past couple of months as volumes on peer-to-peer marketplaces surge.

From NFTs representing NBA finals moments to crypto industry character cards, the total lifetime NFT volume on the Ethereum blockchain alone has exceeded $120 million, according to crypto research firm Messari.

Messari’s research tracked the demand for NFTs, which includes digital art, collectibles and in-game items, over the third quarter. It found the cumulative number of users who interacted with peer-to-peer NFT marketplace OpenSea surpassed 25,000, and that the platform saw a record $2 million in total volume in September;

Some of the most popular items on the marketplace include cards featuring popular crypto industry insiders such as Uniswap’s Hayden Adams and Ethereum founder Vitalik Buterin.

The average NFT purchase price has also significantly increased over the third quarter reaching an average of $161, which is the highest since the early days of CryptoKitties in 2017 and seven times the historical average. Messari stated:

“Average spending on NFTs has beaten the historical average of $23 for 150 consecutive days.”

The research noted that digital art marketplace Rarible had launched its own liquidity mining incentives in the third quarter which caused volumes to surge to more than $10 million as traders bought and sold NFTs to earn RARI tokens.

Non-fungible token maker, Dapper Labs, has also had a highly successful week with its NBA Top Shot collectibles which have been selling out within minutes. The most recent set called “The Finals” included nine rare moments from the 2020 NBA finals which culminated with a Los Angeles Lakers win.

The sets of digitally verified rare collectibles, including trading cards and digital clips, sold for $230 per pack. When launched, The Finals sold $163,530 worth of NFTs in roughly two mins and the top buyers spent over $5,000 each on NFTs, according to cryptoslam.io.

A recent blog post noted that almost 8,600 NBA collectibles have been sold P2P for a combined sum of around $330,000 over the last two weeks.

NBA Top Shot, launched in full earlier this month after clocking over $2 million in revenue in private beta.





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