It is estimated by the Asian Development Bank that the gap in trade finance currently sits at US $1.5tn and according to the World Economic Forum there is potential for it to grow to US $2.5tn by 2025. Developing countries and small businesses are affected the most by this widening gap as alternatives to bank financing are limited. Governments, Enterprises, and Corporates are looking to the digitization of trade assets to help solve this gap and Xinfin’s Hybrid Blockchain is aiming to be part of the solution.
In early 2017, Xinfin set their sights on creating a peer to peer marketplace for trade and finance, one that would make it easy for businesses around the globe to finance projects, factor invoices, create letters of credit or finance other critical funding needs. This peer to peer marketplace aptly named TradeFinex, would create smart contracts where documents and transaction details could be recorded on Xinfin’s Hybrid Blockchain and made available for approved financiers to offer terms and financing. Two years later Xinfin’s vision for transforming global trade and finance has materialized with the official launch of TradeFinex, Xinfin’s flagship trade finance dApp.
Xinfin’s Hybrid Blockchain is the first of its kind offering both private and public states where enterprises can keep important transaction information confidential in the private state while mitigating risk with confirmation in the public state. TradeFinex uses the power of Xinfin’s Hybrid Blockchain to create a secure platform for buyers, suppliers, and brokers to create financing opportunities in a secondary marketplace, helping businesses across the globe have access to needed capital.
For Buyer’s, Suppliers and Brokers
Buyers, suppliers, and brokers can use TradeFinex to easily load their details and documents into a form that can be completed in less than 5 minutes to instantly create a contract hash where financiers can review all documents and details. It’s important to note that the only requirement to create a trade instrument on TradeFinex is having a Xinfin Wallet with at least 1 XDC in your wallet. There is a link provided on the form for instructions on how to do this if one has not yet been set up.
If a buyer wants to finance a receivable invoice, all they need to do is enter their private key from their Xinfin Wallet, click on “Receivable” under Type of Instrument, enter their Country of Origin, select their Preferred Currency – TradeFinex supports USD, JPY, GBP, EUR or XDC, enter the value to be financed and the Maturity Date of the instrument being created.
After these details are selected and entered, all available and supporting documents can be uploaded in PDF form. These documents are everything a financier needs to decide whether to finance the instrument. The only cost to using TradeFinex is a US $10 charge for uploading documents which is payable via PayPal.
Once all the details are submitted, a form to enter your PayPal information will appear to complete the transaction.
TradeFinex immediately creates a contract hash and loads all details onto Xinfin’s Hybrid Blockchain where only Xinfin Masternode holders can review contract details and offer financing. The contract hash can be viewed by visiting Xinfin’s network block explorer.
Types of Available Funding
TradeFinex can create a wide array of funding instruments with receivable and payable financing, letters of credit, bank guarantees, standby letters of credit, warehouse receipts and other instruments such as bond issues just a click away. The form is so simple to complete, it may be the easiest method available to create a trade instrument in the marketplace.
The wide array of funding options for buyers, suppliers, and brokers gives businesses in remote locations the ability to get financing where traditional banking relationships are not easily established, or where alternative financing is preferred to traditional options. For example, a small independent farmer in a remote area can store their crop in a warehouse for future sale, while financing the cost of their crop with TradeFinex. The options are limitless as well as borderless.
Xinfin’s Approved Financiers
TradeFinex offers traditional banks and non-traditional lenders the ability to use Xinfin’s Hybrid Blockchain to create financing options for borrowers from anywhere in the world to anyone who wants to access financing through TradeFinex.
Financiers on TradeFinex are required to purchase 10 million XDC, Xinfin’s native token and stake to a masternode on the network. Xinfin has developed its XDC protocol to allow financiers to hold securitized trade finance assets or negotiable instruments in a fully tokenized digital form in their custody. Whitelisted by regulators for trade and finance digitization, tokenization and settlement, Xinfin and TradeFinex are part of the Abu Dhabi Global Markets Reg Lab.
Xinfin has positioned itself squarely in the trade finance industry with its peer to peer network, offering fraud prevention through transparency and risk mitigation for financiers on the network. Businesses small and large are now able to access capital that was previously unavailable, helping to bridge the gap in trade finance and creating opportunities in developing countries across the globe.
To get started and create a trade instrument, visit tradefinex.org.
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Thank You, The TCAT team.