Dateline: October 12, 2017 CleanTech Group
Blockchain and Supply Chain Financing: A Conversation with Skuchain
“A first use case we decided to tackle is around digitization of trade finance. We did the first trade finance transaction on the blockchain and that involved Wells Fargo, Commonwealth Bank of Australia and Brighann Cotton. As part of that transaction we shipped a bale of cotton from Texas to China. While we continued to work with banks in the wake of this proof of concept, we discovered that when it comes to trade, banks are only service providers. The party that really drives the transaction is the anchor buyer. Buyers’ major pain point is the tracking and tracing of goods as they move through the supply chain. But while they seek that extra visibility, suppliers consider this digitization as additional cost without benefits, and adoption becomes a problem. We decided to tackle this problem of adoption by offering a solution for supply chain finance, and in particular, inventory financing. Instead of a supplier taking on financing through the receivable, which can be quite costly, we buy the inventory outright, and get it financed from the buyer’s cost of capital. The supplier gets immediate working capital relief and the buyer gets lower cost of goods, everybody wins. This definitely greases the wheel for adoption.”
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