Babbitt Column | How Cross-border Financial Blockchain Service Platform Achieves Cross-border Receivables Financing and Trade Linkage

Recently, Xiamen has been approved to pilot the cross-border financial blockchain service platform, becoming the ninth pilot area after Shanghai, Jiangsu, Shaanxi, Beijing, Chongqing, Zhejiang, Fuzhou and Ningbo. It is reported that on July 10, ICBC Xiamen Jimei Branch successfully handled the export invoice financing business for Yanzhan Optoelectronics (Xiamen) Co., Ltd. through the cross-border financial blockchain platform, with a financing amount of US$1.45 million, marking cross-border finance. The pilot work of the blockchain service platform was fully launched in Xiamen. This paper is mainly about the function of cross-border financial blockchain service platform and how to realize cross-border accounts receivable financing and trade linkage action.

I. Introduction of cross-border financial blockchain service platform

The cross-border business blockchain service platform is initiated by the State Administration of Foreign Exchange, and the local foreign exchange management bureaus and banks participate in the joint construction and “regulation of services” business processing platform. On March 22 , 2019, the platform pilot work officially opened. . The purpose is to rebuild the existing export receivables trade financing process based on the background of current foreign exchange business policies, and gradually establish a national unified cross-border business blockchain service platform to support the market entities. Cross-border business handling, effectively serve the real economy, and focus on solving the problem of financing difficulties and financing for SMEs.

At present, the cross-border financial blockchain service platform pilot includes three business scenarios, namely, “export receivables financing (after delivery)”, “enterprise cross-border credit information authorization verification” and “imported cash on delivery financing”. Among them, the business scenarios of “export receivables financing (after delivery)” and “enterprise cross-border credit information authorization verification” have been opened, and the “imported cash on delivery financing” business scene has not been opened yet .

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1 “Exports Receivables Financing (After Delivery)” business scenario

“Exports Receivables Financing (After Delivery)” business scenario, through the blockchain data non-tamperable characteristics , the entire business process of trade finance is managed on the cross-border financial blockchain service platform, and export trade financing The core document “Export Customs Declaration Form” is checked through the blockchain system to verify the authenticity of the export declaration form, automatically calculate the financing balance of the corresponding customs declaration form, prevent duplicate financing and over-funding , and greatly improve the bank export financing business. The time limit for approval and reduction of corporate financing costs .

2 “Business cross-border credit information authorization verification” business scenario

The business scenario of “Enterprise Cross-border Credit Information Authorization Verification” enables the bank to query the company's basic information, transaction credit information, and supervision credit information, and further expand the channels and sources for banks to obtain corporate credit information.

By reducing the risk of trust in data security, the pilot platform gradually explores the realization of blockchain technology to enable financial innovation. At the same time, through the real logistics, information flow, and capital flow, the “three streams are one”, and the funds are “deactivated” . Submitting corporate financing applications on the platform, accepting financing, verifying the authenticity and uniqueness of the customs declaration, and then going to the financing review and registration and lending, the entire export receivables financing business process is clear and concise, greatly improving the bank's trade background. The accuracy of the sexual review and the efficiency of the financing business .

Second, the reasons for the establishment of cross-border financial blockchain service platform

The reason for setting up a cross-border financial blockchain service platform is to realize the anti-counterfeiting traceability of transaction information under the support of blockchain technology on the one hand , and to realize the inter-enterprise, enterprise and financial institutions under the technical background of blockchain technology. On the other hand, through the credibility of government credibility, the parties to the transaction can confidently access their business flow information to the blockchain platform, completely eliminating the obstacles to the formation of financial information through transaction information asymmetry .

In the traditional import and export trade financing, financial institutions such as banks rely mainly on paper documents provided by enterprises for auditing and processing, and lack of other verification channels . At the same time, due to the independent business between financial institutions , the trade involves real logistics, capital flow, information flow, long transaction chain, wide scope , and information sharing between financial institutions is not shared, asymmetry , often there is trade background authenticity And verification problems such as repetitive financing, these are important factors that make financial institutions difficult to lend and difficult for corporate financing, including:

1 Accounts receivable trade background verification cost is high and low efficiency

In traditional trade finance, most of the papers are paper-based documents and the trading habits are quite different. It is difficult for all transactions to completely restore the original transaction through post-examination. It is difficult to verify the authenticity of a trade and the performance certificate provided by the company only by contract and invoice. The correspondence between the material and the basic transaction of the trade financing, whether there is repeated financing in a transaction, etc. are common problems in practice.

Due to the high difficulty and high cost of verification, most financial institutions in the market continue to relax trade requirements, and even evolve into the independent guarantee commitment of the main body of the enterprise (such as legal representative and actual controller) to replace the trade background essence of each financing. Verification.

In addition, the review of the background of the trade receivables in the shortest time is also the biggest difficulty and pain point in the trade finance project.

Therefore, cross-border trade financing, such as difficulty in authenticity review, low efficiency of business processing, repeated financing, and difficulty in supervision , ultimately increase the financing cost of enterprises, while the lack of substantive verification of trade background authenticity and the neglect of risk control, Leading to trade financing fraud cases, and even financial crimes emerge one after another.

2 Transaction information is opaque

Important factors in the trade finance sector: insufficient trade background elements such as cargo information, transaction documents/document information, and capital information . In practice, it is often difficult for financial institutions such as banks to require the parties to cooperate to provide corresponding transaction data.

In fact, only when the transaction information is transparent and transparent, the financing efficiency can be truly improved, and the commercial demand of trade financing can be met. Only by truly putting the authenticity of the trade background in place can truly verify the authenticity of the trade background and ensure the safety of trade finance. Efficient.

Can the application of financial technology tools such as blockchain technology really promote the efficient and convenient circulation of production factors such as logistics, capital flow and information flow in the financial field, and speed up cross-border trade financing in the context of financial innovation, still need the government and each The joint efforts of the industry. It is true that the decentralized, distributed accounting, and non-tamperable technical features of the blockchain contribute to the verification of the authenticity of the trade background. However, the deepening and application of blockchain technology in the financial field still requires the consensus of the financial industry.

Author: Chen Yunfeng

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