An Industry Study of Blockchain Technology’s Impact on Trade Finance

Hellwig, Daniel; Huchzermeier, Arnd

doi:10.2139/ssrn.3453767

Cited by 8 publications

(6 citation statements)

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“…However, even the biggest corporations lack the capacity to access reliable and up-to-date information throughout their extended supply networks [ 103 , 153 ]. The principal cause of high financing rates and transaction costs in the incumbent trade and supply chain finance processes is the risk premium due the lack of transparency in credit evaluation processes [ 65 , 93 ]. Moreover, the limited visibility does not only ignite more than 25,000 disputes in SCF every year with USD 100 million tied up at any given time [ 15 ], but also hampers the collection of receivables for the core firm [ 47 , 92 ].…”

Section: Findings and Discussionmentioning

confidence: 99%

Blockchain and supply chain finance: a critical literature review at the intersection of operations, finance and law

Ioannou

Demirel

2022

J BANK FINANC TECHNOL

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In the current environment, where the Covid-19 pandemic has exposed the vulnerabilities of the incumbent paper-based trade and supply chain finance systems, digital transformation pledges to alleviate the friction on international trade. Here, we provide a timely review of state-of-the-art industry applications and theoretical perspectives on the use of blockchain as the medium toward digitalisation for supply chain finance systems. We argue that blockchain technology has an innovation promoting role in supply chain finance solutions through reducing inefficiencies and increasing visibility between different parties, which have hitherto constituted the main challenges in this sphere. Based on a review of the academic literature as well as an analysis of the industrial solutions that have emerged, we identify and discuss the financial, operational and legal challenges encountered in supply chain financing and the promise of blockchain to address these limitations. We discuss the bottlenecks as well as the benefits of blockchain and identify some necessary conditions required for the emergence of blockchain-enabled trade and supply chain financing, such as the establishment of co-opetition among supply chain actors, integration with IoT systems for data quality, and reform of regulatory and legal frameworks. We conclude by identifying promising research directions about the implementation process, inviting further research into the transformation of business models toward a more collaborative nature.

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Section: Findings and Discussionmentioning

confidence: 99%

Blockchain and supply chain finance: a critical literature review at the intersection of operations, finance and law

Ioannou

Demirel

2022

J BANK FINANC TECHNOL

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“…Hellwig et al 17 have done a study on the industry study of blockchain technology's impact on trade finance. They have done a long‐form interview with 147 industry experts in the trade finance ecosystem who were familiar with blockchain technology.…”

Section: Literature Reviews and Discussionmentioning

confidence: 99%

Decentralized trade finance using blockchain and lightning network

Kumar

Amin

2022

Security and Privacy

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A decentralized trade finance system is urgently needed, as smart contracts and blockchain can make the entire process fast, secure, and efficient while also allowing ordinary people to participate in the global economy. Decentralization will increase trust and transparency, as well as allow smaller businesses to participate in the industry, resulting in more jobs and a boost to the economy. We have also taken a decentralized approach to solving this massive problem with our project. We propose a decentralized trade finance model that is owned by the general public, such as you and me. On the one hand, a community of people like you and me give liquidity to the platform's liquidity pool via a lighting network, while on the other hand, importers and exporters can create profiles and engage in trade finance via the decentralized network. The exporter will use the platform validator to validate their invoice and then apply for trade finance.If everything goes well, the exporter will get monies from the liquidity pool, and the platform will be compensated by the importer after the trade is completed.Everyone involved in the process will receive trade tokens when each successful deal is completed, incentivizing the participants' good behavior.

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“…When the conditions selected by the users are met, these contracts automatically execute the terms, for example, the payment of service. -Streamline trade (Hellwig & Huchzermeier, 2019). The validation times of exchanges between suppliers and customers (contracts, signatures, orders, payments) are drastically reduced, and the management of flows and relationships with partners takes place almost in real time.…”

Section: Blockchainmentioning

confidence: 99%

Fake news, misinformation, disinformation and supply chain risks and disruptions: risk management and resilience using blockchain

Petratos

Faccia

2023

Ann Oper Res

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Fake news, misinformation and disinformation have significantly increased over the past years, and they have a profound effect on societies and supply chains. This paper examines the relationship of information risks with supply chain disruptions and proposes blockchain applications and strategies to mitigate and manage them. We critically review the literature of SCRM and SCRES and find that information flows and risks are relatively attracting less attention. We contribute by suggesting that information integrates other flows, processes and operations, and it is an overarching theme that is essential in every part of the supply chain. Based on related studies we create a theoretical framework that incorporates fake news, misinformation and disinformation. To our knowledge, this is a first attempt to combine types of misleading information and SCRM/SCRES. We find that fake news, misinformation and disinformation can be amplified and cause larger supply chain disruptions, especially when they are exogenous and intentional. Finally, we present both theoretical and practical applications of blockchain technology to supply chain and find support that blockchain can actually advance risk management and resilience of supply chains. Cooperation and information sharing are effective strategies.

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An Industry Study of Blockchain Technology’s Impact on Trade Finance

Cited by 8 publications

References 0 publications

Blockchain and supply chain finance: a critical literature review at the intersection of operations, finance and law

Blockchain and supply chain finance: a critical literature review at the intersection of operations, finance and law

Decentralized trade finance using blockchain and lightning network

Fake news, misinformation, disinformation and supply chain risks and disruptions: risk management and resilience using blockchain

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