How does blockchain empower "chain" finance

According to statistics from authoritative departments, as of the end of 2020, the balance of loan renewals for small and micro enterprises reached 2.25 trillion yuan, a year-on-year increase of 56.41%. While seeing the above-mentioned achievements, we also noticed that some small and medium-sized enterprises have difficulty in financing and expensive financing, which makes some enterprises with good development prospects in the industrial chain miss good opportunities, which is regrettable.

With the deep penetration of existing participants and new entrants into the market, supply chain finance will usher in a period of rapid development in the future. Relevant media predict that the market size is expected to reach 19.19 trillion yuan in 2022.

In the context of an ever-expanding market, how to use new technologies to identify the strengths and weaknesses of enterprises in the supply chain and provide precise credit support to provide systematic financial solutions for key enterprises in the supply chain and upstream and downstream enterprises has become a prominent issue. Reality.

"Chain" finance is the provision of financial services by financial institutions relying on the trade behavior between core enterprises and upstream and downstream enterprises in the supply chain, which can cover the financing needs of procurement, production, inventory and sales in the supply chain.

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However, in the process of business development, many risks have also been exposed, including trade distortion, delay in payment by the buyer, commercial disputes, unsecured, failure to deliver goods on time and in volume, and many other issues. Especially between the core enterprises on the chain and the upstream and downstream enterprises, there are methods such as extending the account period to relieve their respective financial pressures. If there is a crisis in a certain enterprise on the chain, it will cause problems in the entire supply chain.

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For example, as a bank, due to the need for capital security, the bank only provides financing services to the core enterprises in the supply chain, but cannot meet the financing needs of thousands of small and medium-sized enterprises in the supply chain, and the problem of difficult financing and expensive financing has always been a problem. Less than a good solution.

In addition, it is difficult to integrate the information of the whole supply chain, the information of upstream and downstream enterprises is separated, and the information transparency is not high, which will lead to the generation of information islands, and the difficulty of verifying the authenticity of trade backgrounds are the key factors restricting the development of supply chain finance.

In the face of the above problems, blockchain technology, as an infrastructure technology supporting the digital economy, has technical characteristics such as distributed shared ledgers, openness and transparency, tamper-proof, and traceability, which are well suited to chain finance's multi-trust subjects, multi-party collaboration, Features such as high-frequency trading have great potential in better linking capital needs and further solving the financing difficulties of small and medium-sized enterprises.

Jinse Finance Live Report, Wanxiang Blockchain Chief Technology Officer: The biggest difficulty of blockchain is not technology: Jinse Finance live report, in the new finance 100-person forum, Wanxiang Blockchain Chief Technology Officer Luo Rongge said that blockchain The biggest difficulty of the chain is how to find the application scenarios just needed, not the technology, because technology will always find a way to solve it. [2018/4/27]

Chain finance is a typical scenario of multi-subject participation, information asymmetry, imperfect credit mechanism, and non-standard credit standards. The emergence of blockchain technology can effectively realize the trust transfer between supply chain enterprises and help enterprises to better revitalize Assets are of great significance to improving the financial efficiency of the entire chain.

First of all, it helps to make chain financial information transparent and prevent information islands.

Under the framework of blockchain technology, through hierarchical encrypted storage on and off the data chain, the accuracy and non-tampering of data can be guaranteed under the premise of data security and privacy, and more efficient independent data transfer between different applications can be realized. The system can constrain the behavior of participants in chain finance, integrate relevant transaction data, and form a complete record of online contracts, payments, documents, etc., to verify the authenticity of trade behavior and break the island of information on the chain question.

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At the same time, the chain financial system empowered by the blockchain can form an information architecture with product information flow as the main body, and business flow, logistics, and capital flow to support it. It is building a modern supply chain financial system and better promoting financial services. Economically significant.

Secondly, improve the efficiency of chain financial credit transmission and reduce financing costs.

In the traditional financing process, the endorsement credit of core enterprises will continue to weaken with the extension of the chain, and small and medium-sized enterprises at the end often cannot enjoy the credit radiation of core enterprises on the chain. The consensus mechanism design of the block chain, the data on the chain cannot be tampered with, traceable, and can carry value, which can ensure that the actual debt claims are mapped to the chain and transmitted based on legal and compliance requirements. The core enterprise endorsement utility can be along The credible financing link transmission realizes credit transmission, penetration and extension, effectively improves the efficiency of financial credit transmission, greatly reduces the cumbersome verification procedures that have been increased due to the trust crisis in the traditional process, and can reduce financial institutions' reluctance to refuse loans. The phenomenon of lending can effectively reduce the financing cost of enterprises on the chain.

Finally, it can prevent contract performance risks in chain finance and improve the level of supervision.

The value of finance is to serve the cross-cycle capital allocation, and blockchain smart contract technology effectively carries this scenario. The smart contract technology of the blockchain can build the trade contract on the blockchain for penetrating automatic payment, which can not only ensure the smooth execution of the contract in the absence of third-party supervision, but also eliminate the possibility of manual operation. The risk of default in the future, to ensure the closed circulation of funds in the core enterprises of the industrial chain and upstream and downstream enterprises, precise drip irrigation to each node of the chain, and reduce the loan risk factor of financial institutions. At the same time, the on-chain encryption and traceability of supply chain financial information ensures the authenticity and accuracy of the data, allowing regulatory agencies to analyze, warn, and judge the performance and capital flow of specific companies on the chain, reducing regulatory costs and improving supervision. level.

In September 2020, eight departments including the People's Bank of China jointly issued the "Opinions on Regulating the Development of Supply Chain Finance to Support the Stable Cycle and Optimization and Upgrading of the Supply Chain Industry Chain". Efficiency, reduce enterprise costs, serve the integrity and stability of the supply chain industrial chain, support the optimization and upgrading of the industrial chain and the national strategic layout, steadily promote the financial regulation, development and innovation of the supply chain, improve the overall financial service level of the industrial chain, and explore the supply chain financing settlement line Upscaling and digitization levels.

Technology empowerment, new technologies represented by blockchain continue to empower the financial service model, transforming the production behavior, operating risks, industrial data, corporate credit, industry characteristics, etc. of industrial entities into visible, readable and readable information on financial attributes. Trustworthy, assessable, verifiable, and transferable information helps banks and other financial institutions to better understand industries, understand companies, assess risks, more accurately identify the real capital needs of companies, intelligently monitor financial risks, and make services more accurate and efficient .

As a one-stop solution provider of blockchain technology, Wanglian Technology has also continued to develop and accumulate in the field of chain finance. The supply chain financing service platform, bill financing service platform, and cloud factoring financing service platform we have built can enable financial The real data among supply chain participants such as institutions, core enterprises of the industrial chain, chain enterprises, and suppliers are all uploaded to the chain, releasing and transmitting the credit of core enterprises, reducing capital settlement costs and financing costs of the industrial chain, and enhancing the liquidity of funds and assets. At the same time, we will continue to innovate the clearing and settlement channels, effectively improve the efficiency of clearing and settlement, better link capital needs, and promote the healthy development of the entire supply chain financial ecology.

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