On April 17 , the Tianjin Port Block Chain Verification Pilot Project launched the trial operation and the blockchain cross-border trade service network conference, and completed the first blockchain customs declaration.
With the technical advantages in the blockchain field, the financial account has actively participated in the project construction, and for the first time in the country, the organic combination of blockchain technology and cross-border trade has been realized. The project mainly uses the technical characteristics of blockchain traceability and non-tamperability to realize the trust transfer between cross-border trade participants, creating a convenient, efficient and credible trading environment, and initially establishing a new ecology of facilitating trade. A major breakthrough in the application of blockchains in financial scenarios.
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One, Bottlenecks in cross-border trade: convenience + trust
Cross-border trade, in the narrow sense, refers to the exchange of goods and labor between countries, and broadly covers the cross-border import and export arrangements, cross-border trade models, cross-border settlement and other related processes.
As the globalization process deepens, trade between countries becomes more frequent and interdependent, and global value networks are becoming more sophisticated. According to statistics released by the World Trade Organization ( WTO ), in the three decades before 2010 , the world's total merchandise trade maintained a growth rate of about 7% per year, reaching $ 18 trillion in 2011 . Although the world commodity trade experienced a brief decline due to the impact of the financial crisis, it has gradually recovered: the total trade volume in 2017 was 17.4 trillion US dollars, and further rebounded in 2018 .
Since joining the WTO in 2001 , China has always played an important role in international trade. Especially after the implementation of the “One Belt, One Road ” strategy, China’s trade relations with overseas countries have further deepened and the scale of trade has reached record highs. According to data from the General Administration of Customs of China, China's total import and export volume reached 30.5 trillion yuan in 2018 , an increase of 9.7% year-on-year; the total import and export volume in the first quarter of 2019 exceeded 7 trillion yuan, an increase of about 4.5% year-on-year.
Large-scale cross-border trade has facilitated the rapid integration and circulation of the world economy, and resources have been optimized globally. However, due to the differences and changes in economic and trade policies and other factors, cross-border trade still has many problems in the actual operation process, and the obvious comparison is the problem of inefficiency and lack of trust .
Inefficiency is mainly reflected in the complex process of cross-border trade, multi-agent participation and the variety and quantity of documents involved . According to the United Nations Centre for Trade Facilitation and Electronic Commerce ( UN/CEFACT ), in international trade, on average, each shipment involves 27 trade participants, 40 documents, and nearly 400 copies.
In addition to the credit of the subject itself, trust in cross-border trade needs to rely more on the support of trade-related data. Cross-border trade can be said to be a “data-intensive” industry. However, under the existing model, a large amount of data information still needs to be transferred through paper documents or third-party hosting. At the same time, as the globalization process is further accelerated, more and more cross-border trade participants are involved, which makes the data source scattered and the authenticity difficult to confirm. In addition, the lack of uniform specifications in the data format makes it difficult to effectively transmit data, and the credibility is also repeated. There is a gradual reduction in the transmission of fraud risks.
More importantly, all types of entities today view data as a core asset. In the absence of data security and ownership, no entity is willing or able to share it with other entities. To a certain extent, this fragmentation of business data and the formation of data islands have greatly affected data interoperability, which has led to the problem of lack of trust.
two, When cross-border trade " catch up " blockchain
In October 2018 , the State Council issued the "Work Plan for Optimizing the Port Business Environment to Promote Cross-Border Trade Facilitation", which mainly proposed 20 specific measures around " reduction of documents, excellent procedures, timeliness, and cost reduction ". Standardize the international advanced level, innovate supervision methods, optimize the customs clearance process, improve customs clearance efficiency, reduce customs clearance costs, and create a stable, fair, transparent and predictable port business environment.
The document puts forward requirements from the policy level, but how to achieve it in reality? – Blockchain technology is a possible technical solution.
The blockchain is considered to be the most disruptive core technology after steam engines, electricity, and the Internet. Due to its non-tamperability, traceability, and distributed features, the blockchain can ensure data authenticity and security without centralization or third-party mechanisms, and implement trust transfer through algorithms. Therefore, the blockchain is internationally recognized as a technology with great potential and adapting to cross-border trade scenarios.
This adaptation is mainly reflected in:
1. The technical characteristics that cannot be tampered with and traceable make the data of the whole process of cross-border trade ensure the authenticity in the chain, and the credibility will not be reduced due to the transmission of the information layer;
Second, minimize human intervention in the process of data transmission, relying on the consensus of blockchain technology and algorithms to establish a trust network between the various entities;
Third, through intelligent contracts and chain data authorization, covering all aspects of cross-border trade, opening up data streams, automatically triggering and implementing relevant standardization instructions, while improving automation and efficiency, it can also avoid credit fraud to a certain extent. Risk and operational risk.
At present, the international community has always advocated cross-border trade facilitation. The key is to open up logistics, capital flow and information flow. Among them, the information flow is invisible and the most difficult to monitor, but it is also the most critical part. Opening up the information flow will greatly increase the speed and efficiency of logistics and capital flow.
As far as the cross-border trade blockchain project in Tianjin Port is concerned, blockchain technology does not directly affect logistics and capital flow, but relies on traceability and non-tamperability to reshape the flow of information across the entire process of cross-border trade. The chain of trust is transmitted, thus achieving three-in-one integration and empowering cross-border trade.
But any technology is not perfect. As long as there is a link of human interference, there will be uncertainty, which cannot be solved by the technology itself. As far as the blockchain is concerned, the authenticity of the data under the chain, the enthusiasm and cooperation of the participating parties, and regulatory compliance are all real and inevitable.
Even so, the combination of blockchain and cross-border trade can make a difference in optimizing trade processes, enhancing trade efficiency, and increasing trade facilitation.
Third, the financial credit account "black technology" to help blockchain cross-border trade
Ping An Group has always been very optimistic and attaches importance to the development of blockchain technology. In 2018 , the blockchain of Ping An District's annual trading volume exceeded 20 trillion yuan. Ping An's self-developed credit chain (FiMAX) blockchain technology, which uniquely masters 3D zero-knowledge verification technology in non-monetary scenarios, can still achieve or exceed traditional database performance in national secret and zero-knowledge environments, and can achieve 50,000 pens. While maintaining high throughput per second, it maintains a low latency of less than 0.01 seconds.
Ping An is one of the first organizations to obtain the information service for the blockchain information service. Of the 197 blockchain projects that were filed, five were from Ping An Group and two were from Ping An Financial Accounts. The “ Tianjin Port Blockchain Cross-border Trade Network ” was one of them.
As a cloud platform of Ping An Group, which is committed to building the world's leading full-chain financial technology services, it has emerged in the blockchain field. Ping An Group's 2018 annual financial report shows that Ping An has built the world's largest commercial blockchain platform through financial account, and has provided services to more than 200 banks, 200,000 companies and 500 governments and other business organizations at home and abroad. As of December 31 , 2018 , there were more than 44,000 blockchain nodes in the financial account, which was an increase of 225.5% over the same period of the previous year.
In addition, Financial Accounts has 161 patent applications, of which 6 are authorized. In terms of landing, Financial Accounts has applied blockchain technology in the five major ecosystems of finance, real estate, automobile, medical and smart cities, and 14 application scenarios.
This Tianjin port blockchain cross-border pilot project is another major practice in the field of blockchain.
Figure: Overall architecture of cross-border trade blockchain technology
Source: Financial Accounts Link "White Paper on Cross-border Trade Blockchain"
The OCEAN , a blockchain cross-border trade service platform that participates in the online financial account, is based on the FiMAX technology independently developed by Ping An, using industry-leading cross-chain systems, through the establishment of various levels of networks and cross-level network channels. To achieve the flow of data between different systems and different parties.
This system will be divided into three types: management node, transaction node and client according to the specific conditions of the enterprise. Different types of enterprises will have different linking methods and permissions. At the same time, based on the area covered by the blockchain distributed ledger, the books are divided into private books, regional books and international books.
How to solve the problem that the participants are not willing to put the data on the chain because they are worried about data security and ownership? This relies on the full encryption technology framework in FiMAX technology. In this framework, all data is encrypted by the data owner and then chained. That is to say, in the blockchain network, data is not directly shared, but flows are restricted under the premise of ensuring data security.
In terms of the use of encrypted data, the financial account pass uses a 3D zero-knowledge algorithm. The zero-knowledge proof is not new, it enables encrypted data to be verified by others without providing any valid information. This concept is often mentioned, but there are always restrictions at the application level. However, Ping An announced that the 3D zero-knowledge algorithm used in this time has achieved tremendous improvement in performance and truly achieved commercial standards.
In addition, the financial account book through the development of the data standard system to achieve the standardization of the uplink data format, open data interface for data writing and data calls, while the blockchain and Internet of Things, big data, artificial intelligence and other technologies Combine, hope to achieve product traceability, intelligent customs clearance, intelligent risk control. Among them, the integration of blockchain and Internet of Things can greatly improve data collection efficiency and source credibility: use IoT sensors to collect data, and then directly upload the blockchain network to replace the traditional manual entry.
According to the design of the blockchain cross-border trade service platform, under the ideal state, each participating entity will join the blockchain network as an independent node, encrypt and upload its own data based on the unified data standard, and have ownership and control over the data. . The data of each link is kept in ciphertext in the distributed ledger of each level. When any participant in the network needs to check relevant data based on business needs, the data owner can directly authorize the completion of data transfer. If the authorization cannot be obtained, the demand side can also verify the authenticity of the data based on a zero-knowledge proof algorithm.
At the same time, after using the blockchain technology to realize the smooth flow of the information flow chain, each entity can automatically process the business process faster than the corresponding business needs or the blockchain network intelligent contract, thereby improving the overall business efficiency.
In this way, the Tianjin Port Blockchain cross-border trade service platform solves the problems of “inefficiency” and “missing trust between entities” in the traditional business model.
This is not the first time in the industry to try to use blockchain technology to transform cross-border trade, but previous projects have focused more on cross-border payment and settlement in trade. In reality, at present, cross-border payment through blockchain technology will inevitably use digital currency as an intermediary. But in China, digital currency is a very sensitive field, and most companies are reluctant to dare to touch this field. This has also caused such a situation: the landing project basically does not involve digital currency, and projects involving digital currency are generally difficult to implement.
The same is true for the Tianjin Port project, which was participated in the financial account book. The blockchain technology was used to realize the data transfer, but the existing cross-border payment model was not reformed. Although this does not reshape the entire process of cross-border trade, it has circumvented legal risks to some extent.
Fourth, blockchain empowerment: improve trade convenience, serve small and medium enterprises
On the basis of promoting the customs clearance convenience, the Tianjin Port Blockchain cross-border trade service network can also play a great role in supporting the development of SMEs by breaking the information asymmetry under the traditional model.
The problem of financing difficulties and financing for small and medium-sized enterprises is a topic that has been heatedly debated in recent years. Supply chain finance, which is said to have a market scale of trillions, is also related to this. However, the actual situation is that SMEs have insufficient credit and high risk factors, and they need to rely on core data or other enterprises to increase their trust. However, in the traditional supply chain, information is difficult to penetrate, credit between subjects cannot be transmitted at different levels, and key data information cannot be mutually verified among enterprises, financial institutions, and regulatory authorities, resulting in the credit and gain of SMEs themselves. The letter is not enough, and there is an embarrassing situation that cannot be financed.
As a financial institution, on the one hand, it is willing to respond to the call of the state to support the development of small and medium-sized enterprises; on the other hand, due to factors such as risk control and cost, it does not dare or have the incentive to handle financing for small and medium-sized enterprises. This creates a contradiction. The key to contradiction lies in trust. For SMEs, trust is largely due to data.
The blockchain cross-border trade service network jointly launched by the financial account and the Tianjin Port, the first aspect of serving SMEs is to help establish the credit system of SMEs and solve the financing problems of SMEs in foreign trade . Multi-party information sharing through blockchain and cross-validation on the chain enables governments, financial institutions and even partners to better evaluate credits for SMEs and use trusted data for trust transmission to solve SMEs Facing financing problems.
Secondly, the blockchain cross-border trade service network can also help SMEs to improve foreign trade efficiency and accelerate capital turnover . Under the traditional customs clearance mode, enterprises that have obtained general customs certification cannot enjoy the treatment of advanced certification enterprises, and there is a clear gap between the customs clearance time and the proportion of distribution control. However, the blockchain technology can realize the integration of customs clearance data online and customs clearance processes. Regulatory authorities can achieve rapid risk identification and business flow based on cross-validation of data on the chain, shorten the original lengthy customs clearance time, improve customs clearance efficiency, and accelerate the capital turnover of SMEs.
In addition, blockchain empowerment of cross-border trade is conducive to SMEs to improve their supply chain management capabilities and rational control of their own risks . After the information is on the chain, SMEs can monitor the progress of foreign trade in real time, so as to rationally arrange production and procurement links, accurately control inventory, reduce risks through refined operations, and improve economic efficiency.
Of course, the use of blockchain technology to reshape cross-border trade is not only to serve small and medium-sized enterprises, but also to create a convenient, efficient and credible trading environment, and initially establish a new ecology of facilitating trade. At the same time, it is also a major breakthrough in the application of blockchain in the financial scene.
When cross-border trade “catch up” with the blockchain, the sparks that collide may not be perfect, but it is good enough and the road ahead is expected.
(Source: Zero Financial)