scholarly journals Blockchain-Enabled Trade Finance Innovation: A Potential Paradigm Shift on Using Letter of Credit

2019 ◽  
Vol 12 (1) ◽  
pp. 188 ◽  
Author(s):  
Shuchih Ernest Chang ◽  
Hueimin Louis Luo ◽  
YiChian Chen
Keyword(s):  
Paradigm Shift ◽  
Business Processes ◽  
Poor Performance ◽  
Future Application ◽  
Trade Finance ◽  
Letter Of Credit ◽  
Blockchain Technology ◽  
Distributed Ledger ◽  
Smart Contract

This paper explores a potential paradigm shift in trade finance utilizing blockchain technology. Traditionally, the centralized operating model has governed trade finance and the manner in which traders handle business processes. However, such heavy reliance on centralized authorities has made for poor performance, the lack of flexibility and transparency, and vulnerability to malicious alteration. The blockchain, as a distributed ledger technology (DLT), has attracted growing attention and has the potential to disrupt legacy finance procedures such as payment by letter of credit (L/C). International trade players may benefit from the technological reengineering of financial processes through the implementation of blockchain- and smart contract-based platforms. From the conceptual perspective of a paradigm shift, this study analyzes the feasibility of blockchain innovation in trade finance through modern blockchain-based L/C initiatives. Moreover, this study also explores blockchain applications in terms of logistics tracking and how it integrates with trade finance procedures. This study contributes to the understanding of a blockchain paradigm shift with a multi-case study. The results may illuminate the potential future application of blockchain finance and provide researchers with an illustrative example of other finance-related capabilities. Studies of trade-related topics such as customs clearances, insurance, and logistics applications need to be addressed in the future to create a comprehensively trustless environment and facilitate the automation of trade.

Exploring blockchain technology in international trade

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shuchih Ernest Chang ◽  
Yi-Chian Chen ◽  
Tzu-Ching Wu
Keyword(s):  
International Trade ◽  
Business Process ◽  
Process Model ◽  
Business Processes ◽  
Process Efficiency ◽  
Practical Case ◽  
Content Type ◽  
Letter Of Credit ◽  
Blockchain Technology ◽  
Smart Contract

Purpose The purpose of this paper is to explore the applicability of blockchain technology in international trade process from a perspective of letter of credit payment. Design/methodology/approach A blockchain-based re-engineering process is designed by employing the blockchain and its affiliated smart contract technology to harvest the benefits of distributed ledger and distributed business workflow automation. Findings Comparative analysis and feasibility study were conducted to identify and validate the prospects, in terms of facilitating process flow and enhancing overall trade performance, of the proposed blockchain-based international trade process model. Practical implications Traditional trade processes suffer from a great number of issues about intermediaries, information latency and trust, which, in turn, hinder overall process efficiency. The emerging blockchain technology may have potentials to mitigate those issues by revolutionizing business processes across enterprise borders in various industries. Originality/value This study contributes to the conceptual design of a blockchain- and smart-contract-based process along with a provision of practical case in business process re-engineering. Further endeavors devoted to blockchain research and application across different sectors are suggested to reach better performance of business process operations.

scholarly journals Application of Distributed Ledger Technology for Settlements by Letters of Credit

2020 ◽  
Vol 15 (6) ◽  
pp. 64-72
Author(s):  
L. G. Efimova
Keyword(s):  
Financial Intermediaries ◽  
Smart Contracts ◽  
Legal Analysis ◽  
Letter Of Credit ◽  
Blockchain Technology ◽  
Distributed Ledger ◽  
Smart Contract ◽  
Distributed Ledger Technology ◽  
New Form ◽  
Letters Of Credit

The paper carries out a legal analysis of three models of settlements by letters of credit with the use of distributed ledger technology. First, this refers to the model of settlements that uses blockchain as a way of transferring documents under the letter of credit. Second, the author investigates the model of settlements where two smart contracts are used. In the author’s view, such smart contracts should be seen as a way of executing the contracts that, in practice, form the settlement procedure with the use of letters of credit. Third, the most interesting is the settlement model where the payer and the recipient of funds (payee) enter into one smart contract that provides non-cash settlements between them with the use of the P2P service. There is no financial intermediary that organizes non-cash settlements in this settlement model. This difference makes it possible to conclude that settlements similar to settlements with the use of letters by credit via blockchain technology and carried out on the principle of P2P, should be considered as a new form of non-cash settlements. The peculiarity of this form of non-cash settlements is the opportunity given to direct participants of the settlement to fulfil their monetary obligations without using cash and without any assistance of financial intermediaries.

scholarly journals Blockchain in Health Care Innovation: Literature Review and Case Study From a Business Ecosystem Perspective (Preprint)

2020 ◽  
Author(s):  
Shuchih Ernest Chang ◽  
YiChian Chen
Keyword(s):  
Health Care ◽  
Life Cycle ◽  
Literature Review ◽  
Case Studies ◽  
Paradigm Shift ◽  
Potential Health ◽  
Business Ecosystem ◽  
Blockchain Technology ◽  
The Impact

BACKGROUND Blockchain technology is leveraging its innovative potential in various sectors and its transformation of business-related processes has drawn much attention. Topics of research interest have focused on medical and health care applications, while research implications have generally concluded in system design, literature reviews, and case studies. However, a general overview and knowledge about the impact on the health care ecosystem is limited. OBJECTIVE This paper explores a potential paradigm shift and ecosystem evolution in health care utilizing blockchain technology. METHODS A literature review with a case study on a pioneering initiative was conducted. With a systematic life cycle analysis, this study sheds light on the evolutionary development of blockchain in health care scenarios and its interactive relationship among stakeholders. RESULTS Four stages—birth, expansion, leadership, and self-renewal or death—in the life cycle of the business ecosystem were explored to elucidate the evolving trajectories of blockchain-based health care implementation. Focused impacts on the traditional health care industry are highlighted within each stage to further support the potential health care paradigm shift in the future. CONCLUSIONS This paper enriches the existing body of literature in this field by illustrating the potential of blockchain in fulfilling stakeholders’ needs and elucidating the phenomenon of coevolution within the health care ecosystem. Blockchain not only catalyzes the interactions among players but also facilitates the formation of the ecosystem life cycle. The collaborative network linked by blockchain may play a critical role on value creation, transfer, and sharing among the health care community. Future efforts may focus on empirical or case studies to validate the proposed evolution of the health care ecosystem.

scholarly journals Discussion on Payment Application in Cross-border E-Commerce Platform from the Perspective of Blockchain

2021 ◽  
Vol 235 ◽  
pp. 03020
Author(s):  
Qian Liao ◽  
Mimi Shao
Keyword(s):  
Information Leakage ◽  
Consumer Information ◽  
Third Party ◽  
Cross Border ◽  
Blockchain Technology ◽  
Distributed Ledger ◽  
Smart Contract ◽  
Cash Payment ◽  
Asymmetric Encryption ◽  
Further Development

Features like the distributed ledger, consensus mechanism, asymmetric encryption technology, smart contract and Token of blockchain can lower transaction cost, enhance trust between customers and merchants, as well as eliminate false payment and consumer information leakage, problems which are common in current payment of cross-border E-Commerce platform. Based on the analysis of existing scholars, this paper studied two payment models: digital cash payment based on blockchain technology and the application of blockchain in third-party payment platform. Then the paper discussed the mechanism of blockchain in cross-border e-commerce payment platform, and creatively proposed a blockchain cross-border e-commerce payment platform, serving as reference and guidance for further development of blockchain technology in cross-border payment.1

Blockchain Technology: Opportunities and Challenges for Small and Large Banks During COVID-19

2021 ◽  
pp. 2140001
Author(s):  
Grazia Dicuonzo ◽  
Francesca Donofrio ◽  
Antonio Fusco ◽  
Vittorio Dell’Atti
Keyword(s):  
International Institutions ◽  
Business Processes ◽  
Banking Sector ◽  
New Technologies ◽  
Social Systems ◽  
Emerging Technology ◽  
Case Study Methodology ◽  
Blockchain Technology ◽  
Study Methodology

New technologies are assuming a prominent role in the transformation of economic and social systems and are capturing the interest of many businesses and international institutions. Blockchain is an emerging technology that is relevant in all sectors, as its applications can be adapted to multiple contexts with possible significant advantages for business. The ability to perform transactions without a central entity acting as a trust guarantor, typical of blockchain, offers the opportunity to rethink the way business processes are managed. Based on the case study methodology, this work aims to understand how blockchain could affect the business model in the banking sector and how the COVID-19 pandemic impacts the implementation of blockchain.

Part I Legal and Practical Challenges to Traditional Trade Finance, 3 Soft Clauses in Letters of Credit

2021 ◽  
Author(s):  
Davies Martin
Keyword(s):  
Trade Finance ◽  
Letter Of Credit ◽  
Exchange Time ◽  
The Past ◽  
Blockchain Technology ◽  
The Future ◽  
Letters Of Credit

Soft clauses in letters of credit make the issuing bank’s obligation conditional upon some event or certification that is in the control either of the applicant, or some agent, entity, or organisation in the applicant’s country. Such clauses make an apparently irrevocable letter of credit into what is, in essence, a conditional undertaking dependent on the applicant’s approval. Soft clauses are not always a vehicle for fraud—there may be genuine reasons for their inclusion—but they certainly make it easy for an applicant to ensure that the issuing bank does not pay the beneficiary. This chapter will consider the problems caused by the use of soft clauses, some possible solutions, and it will suggest alternatives, some of which look to the past (bills of exchange/time drafts), some to the present (open account and standby letters of credit), and some to the future (the advent of blockchain technology).

scholarly journals An intelligent cross-border transaction system based on consortium blockchain: A case study in Shenzhen, China

PLoS ONE ◽  
2021 ◽  
Vol 16 (6) ◽  
pp. e0252489
Author(s):  
Zhengtang Fu ◽  
Peiwu Dong ◽  
Siyao Li ◽  
Yanbing Ju
Keyword(s):  
Numerical Experiments ◽  
Critical Issue ◽  
Allocation System ◽  
Cross Border ◽  
Blockchain Technology ◽  
Profit Allocation ◽  
Smart Contract ◽  
The World ◽  
New Framework

Cross-border transactions have been more and more popular around the world. However, the current cross-border transactions still have risks and challenges, e.g., differences in regulation policies and unbalanced profits of banks. To address this critical issue, we construct a new framework for the transaction system with the support of blockchain technology. In this paper, we propose a new consortium blockchain system, namely asymmetric consortium blockchain (ACB), to ensure the implementation of cross-border transactions. Different from traditional consortium blockchain, the new blockchain system could support the supernode to regulate all the transactions timely. Furthermore, the new smart contract is designed to lower the opportunity loss for each node and make the profits allocation system fairer. In the end, the numerical experiments were carried out based on the transactions of Shenzhen and Hong Kong. The results show that the proposed ACB system is efficient to make the profit allocation fairer for the participants and keep intelligent for the new cross-border transaction system.

scholarly journals Blockchain: Future of Accounting Education

2020 ◽  
Vol 12 (2) ◽  
pp. 14
Author(s):  
Munshi Samaduzzaman
Keyword(s):  
Transaction Cost ◽  
Low Cost ◽  
Accounting Education ◽  
Third Party ◽  
Accounting System ◽  
Accounting Standard ◽  
Peer Communication ◽  
Blockchain Technology ◽  
Distributed Ledger ◽  
Smart Contract

Blockchain will be the future of accounting education. Triple entry accounting system is here, and shared ledger has been considered. From the shared ledger different parties can access transactions. As our discussion reveals that distributed ledger, Smart contract and Blockchain are three important elements in the triple entry accounting system. As a result, blockchain technology is helping the upgrading the process of education system. Blockchain technology is a peer to peer communication that allows participants to secure the settlement of transactions, achieve the transactions and transfer of assets at low cost. With certain advantages there are disadvantages too. Based on performance and acceptance, it is clear that in future the implication of blockchain technology would be developed. The concept of triple accounting has introduced the new way of accounting work replacing accounting standard formula. The blockchain technology eliminates the involvement of third party, maintain transparency and charges low transaction cost. It will save money and time of people as it is secure and due to decentralization, it is not controlled by one single entity. Due to the decentralization, every user of the network can see the file. So, blockchain should the part the Accounting Education in future.

scholarly journals Blockchain Design for Securing Supply Chain Management in Coffee Retailer Network

2021 ◽  
pp. 492-502
Author(s):  
Urshila Ravindran ◽  
Pragya Bhardwaj ◽  
P. Raghu Vamsi
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Business Processes ◽  
Smart Contracts ◽  
Distributed Environment ◽  
Chain Management ◽  
Blockchain Technology ◽  
Asset Tracking ◽  
Distributed Ledger ◽  
Proposed Model

Blockchain is a trusted distributed ledger shared across the business processes. Blockchain technology focuses on automating tasks in a distributed environment. Proving as one of the effective platforms, it helps in mapping the physical commodities to the digital ledger. A digital ledger is like an electronic register for storing the transactions that are taking place among various commodities. The physical commodities include suppliers, manufacturers, exporters, consumers and distributors wherein the distributor plays a major role in determining the product standards. To this end, this paper presents a Blockchain design for securing Supply Chain Management (SCM) in Coffee Retailer Network (CRN). The proposed design made with the view that it further be implemented with smart contracts to establish a private or consortium Blockchain application for the asset tracking processes in the coffee retailer network. The proposed model can bring transparency, sustainability and efficiency in asset tracking.

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