Four forces are competing for blockchain + supply chain finance. How do pure technology companies win the market?
On August 26, the State Council issued an overall plan for six new free trade zones, with blockchain and supply chain construction being highlighted. On the same day, 51 central enterprises signed a mutual recognition alliance for commercial acceptance bills of central enterprises in Beijing. Representatives of the member units of the mutual recognition alliance also signed the "Enterprise Ticket Link" cooperation agreement on the spot. This platform will effectively integrate the industrial chains of central enterprises.
Now, several government agencies and organizations are taking the lead in encouraging enterprises to use new technologies to develop supply chain finance. iResearch predicts that by 2023, the blockchain can increase the overall market penetration rate of supply chain finance by 28.3%; it will bring about 3.6 trillion market size increments to the supply chain finance market. Blockchain + supply chain finance is also being mentioned more as a strategic development plan.
However, observing the recent trends in the implementation of supply chain finance by inter-chain pulse, it is found that blockchain-native enterprises that have deployed supply chain finance earlier, such as Bubi and Yijian Block, lack remarkable achievements in the new round of development. At the same time, some core enterprises in the supply chain have begun to actively adopt blockchain technology to deploy supply chain finance; technology companies, banks and other financial institutions are also deploying new businesses one after another; the quadrilateral pattern of the new battlefield of supply chain finance initial formation.
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Supply chain finance is still the focus of implementation, and favorable policies are issued frequently
Previously, the inter-chain pulse sorted out the blockchain application projects disclosed in the first half of 2019, and the financial category accounted for the highest proportion, a total of 89. Among them, supply chain finance (including trade loans) and cross-border payment/transaction/settlement are the most widely used scenarios, each with 18 landing applications. Among the new landing projects disclosed in July and August, there are not a few applications of supply chain finance.
Inter-chain pulse statistics of blockchain + supply chain financial applications that landed in July and August. Recently, there have been many supply chain finance projects at home and abroad, and the leading entities are also showing a trend of diversification.
On August 9, Xiong’an New District landed the first financial leasing business of inclusive finance for small, medium and micro enterprises supported by blockchain technology. This project is the first “financial leasing + Xiong’an blockchain” + supply chain" business application. On August 1, Tencent Micro Enterprise Chain and Standard Chartered Bank launched the first blockchain supply chain financial business. At the end of July, the first financing business on Ant Financial's "Double Chain Link" was completed.
At the same time, many places are also introducing supporting and encouraging policies to promote the development of blockchain + supply chain finance.
On August 21, 2019, the Zhuhai Hengqin New Area Financial Services Bureau Committee released the "Zhuhai-Macao "Blockchain + Special Finance" White Paper". It is mentioned in the white paper that the combination of blockchain technology and supply chain finance is the regenerative value of empowering finance, and blockchain + supply chain finance will be one of the key directions for the development of blockchain applications in Zhuhai-Macao in the future.
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Blockchain startups are not strong enough, and technology companies are catching up
However, compared with the positive development of the overall environment, domestic enterprises that combined blockchain technology and supply chain finance earlier failed to keep up with the new round of development boom. As early as 2016, blockchain start-ups have completed their application in the field of supply chain finance. In 2017, there was a small upsurge, but in 2019, it showed a decline.
In 2016, Bubi Blockchain has successively reached cooperation with Qianxiang and Yigang.com to build a supply chain financial platform for the gold and jewelry Zhanghong section, and a B2B platform and supply chain financial system for the steel pipe industry. Shang Hongwu, head of the operation of Bubi’s blockchain supply chain financial sector, said that after Bubi’s underlying platform was open-sourced in July 2016, it has been thinking about implementation issues and constantly discussing how to commercialize the feasibility research results. Judging from the results, Bubi’s choice at that time was supply chain finance.
In 2017, Bubi integrated the supply chain financial business, and released the blockchain + supply chain financial product "Yinuo Finance" on May 24. It has successively cooperated with CICC Payment to create an industrial chain financial service platform "CICC Yinuo", and jointly created "Shuangrong Chain" with the Bank of Guiyang. As of the latest report in 2018, "Yino Finance" has cooperated with CICC Payment and China Investment Corporation Morgan, Dongfang Yun, Yinuo Qingyun and other institutions have reached cooperation.
In addition to the Bubi blockchain, in 2017, several blockchain platforms launched supply chain financial products. The supply chain financial service platform Xingbei Cloud Chain was released; Qulian has successively cooperated with Agricultural Bank of China and Huawei to launch a variety of supply chain salary products; Yijian Co., Ltd. cooperated with IBM China Research Institute to jointly release the supply chain financial service system "Yijian Block" ", and completed the investment of hundreds of millions of yuan within three months.
It is worth noting that this batch of companies can be regarded as the first batch of companies in China that started to implement supply chain finance, but now it is difficult to find traces of their implementation.
The introduction of the development of its products on the Yinuo website stopped in August last year. According to the 2018 annual report disclosed by Yijian in the first half of the year, Yijian will vigorously develop the supply chain financial service business based on supply chain management and supplemented by commercial factoring. However, in response to inquiries from the exchange, it stated that the blockchain did not have a significant impact on performance, and reminded investors to pay attention to risks.
Incomplete statistics of the inter-chain pulse. From 2012 to 2019, the total number of supply chain financial projects disclosed by Bubi, Qulian, Complex Beauty, and Wanxiang Blockchain each year were 2, 11, 6, and 1 indivual.Among the cooperative projects, Interchain Pulse found that blockchain start-ups will choose to cooperate with some financial technology companies to build platforms, and then provide financing services for small, medium and micro enterprises. In June 2018, Qulian and Ximei Factoring launched the Ximei Supply Chain Platform to provide comprehensive financial services for small and medium suppliers on the platform. Supply chain finance ABS of private construction enterprises.
Gradually, the role of financial technology companies in blockchain + supply chain finance is becoming more and more important.
In November 2017, Zhongan Technology joined hands with Medical Chain Technology to establish a "dual-chain financial asset circulation platform" around the medical supply chain, with large-scale medical device manufacturers in the pharmaceutical industry as the core enterprises, linking financial institutions to their upstream multi-level supply The provider provides payment and financing services for accounts receivable.
Zhongan Technology is one of the earliest financial technology companies in China to conduct blockchain technology research and technology landing business scenarios. It has a number of technical patents in blockchain technology. Its own blockchain technology platform brand "Anlian "Cloud" has also released several series of products. Different from other blockchain technology companies, Zhongan Technology can provide comprehensive business and technical solution output to partners in terms of supply chain financial business planning and consulting, blockchain technology platform, and business operations, helping partners to quickly implement the supply chain Financial services.
Based on this, ZhongAn's blockchain + supply chain financial business has been applied in insurance, construction, medicine, e-commerce and other industries, and is planning a wider range of application scenarios. The platform” also keeps making new progress.
In October 2018, ZhongAn Technology released the "White Paper on Insurance Token Based on Blockchain Asset Protocol", proposing an open asset protocol and a roadmap for the token economy. In April 2019, Zhenguo Technology (formerly Yilian Technology) announced that based on the double-chain financial asset circulation platform "Xintong+" and the data intelligent credit management platform "Credit+", a breakthrough has been realized based on the "dual-chain A new model of supply chain finance with data system confirmation". In May, at the 5th China Digital Innovation Exhibition and Chief Information Officer Summit (CDIE), ZhongAn launched the accounts receivable token and warehouse receipt token solutions.
According to the relevant person in charge of ZhongAn, ZhongAn is currently promoting the application of supply chain financial solutions in industries such as automobile manufacturing, home appliances, electronics manufacturing, medicine, construction, and logistics and transportation.
Core enterprises use blockchain technology to build a moat, and banking business scenarios cover a wide range
From the perspective of the supply chain financial business of blockchain start-ups, the coldness of the first batch of blockchain start-ups in the supply chain financial market may also be related to their business models.
In the supply chain financial business, blockchain companies often focus on the financing and circulation of accounts receivable; core companies have recently focused on the construction of platforms such as ABS, integrating blockchain technology, and forming their own systems; financial institutions headed by banks The business is fully rolled out, and it is also involved in relatively "unpopular" applications such as Forfeiyan; technology companies, especially financial technology companies, are also occupying more market share by virtue of "cross-border" resources and experience.
In comparison, it is difficult for pure blockchain technology companies to compete with the other three types of companies in terms of resources, and the technology application scenarios are relatively single.
The layout of blockchain start-ups in supply chain finance is more focused on accounts receivable financing/factoring. The complex supply chain financial plan is based on the Baitiao system, and the accounts receivable of Qulian is easily processed through the "golden ticket" system, both of which are essentially deformations of commercial acceptance bills. With the help of blockchain technology, the splitting and circulation of bills can be realized, which is convenient for small, medium and micro enterprises to finance.
According to the statistics of McKinsey Consulting, there are currently 2 trillion US dollars of idle credit accounts in the world. If this bankable and relatively safe receivable is effectively revitalized through supply chain finance, the world can gain an additional potential income of US$20 billion. Data from the National Bureau of Statistics also shows that as of July 2018, the accounts receivable of Chinese enterprises was 13.93 trillion yuan. It is estimated that by 2020, the scale of my country's supply chain financial market will reach 27 trillion yuan.
Although the scale of the accounts receivable financing market continues to expand, compared with traditional trade financing based on factoring and collateral, supply chain financing is more of a systematic financing between core companies and banks arrange. This also means that blockchain companies will encounter the impact of core companies in the supply chain.
On March 1, Suning Finance issued the first supply chain financial ABS. On August 1, Tencent's "supply chain finance + blockchain + ABS platform" Weiqi Chain and Standard Chartered Bank cooperated with the first blockchain supply chain financial business.
On December 18, 2018, Du Xiaoman Finance, as a technical service provider, participated in the supply chain financial ABS issuance of "Zhongtai Tianfeng-Jinbaobei Supply Chain Finance", with a total issuance size of 260 million yuan, and the basic assets were the supply transferred by Poly Company The creditor's rights on undue accounts receivable enjoyed by the merchants for providing goods or services to the subsidiaries of China Hongqiao Altar Co., Ltd. On September 19, 2018, OneConnect launched the ALFA (Alpha) smart ABS platform.
Huang Shaoyu, CEO of OneConnect Investment, once said that it is necessary to reshape the trust mechanism by building blockchain + ABS. He believes that the characteristics of the blockchain effectively solve the synchronization of information in the information transmission mechanism and cannot be tampered with. By reshaping the trust mechanism in the ABS scenario, it will be of great help to the original stakeholders to better obtain the trust of investors.
In addition, large financial institutions can implement more business scenarios in terms of supply chain finance. In the first half of the year, a number of banks took the lead in deploying blockchain Fufeiyan transactions, while Fufeiyan business has a weaker presence in the supply chain financial layout of blockchain technology companies.
On May 22, Guilin Bank connected to the "Rongyi Chain" blockchain forfaiting platform. On April 11, Suning Bank completed the first blockchain forfaiting (BCF) business transaction, the counterparty was the Jiangsu Branch of China Construction Bank, and the target amount was 100 million yuan. On January 22, China CITIC Bank, Bank of China, and Minsheng Bank jointly developed a blockchain forfaiting trading platform, which landed in Jinan Branch.
Zhongan Technology told Mutual Chain Pulse that some blockchain + supply chain projects have stagnated because of four main reasons: first, the lack of business scenarios, and it is difficult to obtain the support of core business owners; second, the lack of business operation capabilities and lack of systematization The business operation management organization failed to effectively promote the products in the upstream and downstream enterprises; the third is that the capital cost is too high, which makes the price given to the financing enterprises unattractive; the fourth is that the industry selection is not suitable, and supply chain finance is currently in the industry Not universal.
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Digital currency and cross-border trade may be two major breakthroughs
The market size of blockchain + supply chain finance is gradually expanding. It is worth noting that blockchain technology originally existed to provide decentralized solutions. The pain point of supply chain finance is also that small, medium and micro enterprises are difficult to finance. Core enterprises and banks master the trust relationship and capital flow in the chain. Inclusive finance is difficult to implement. Today, the new model of blockchain + supply chain is also being captured by core enterprises and banks, and it is difficult for blockchain start-ups to survive. Can the "decentralization" of blockchain supply chain finance be controlled by the "centralized" subject? To lead, is still unknown.
From the point of view of the integration of blockchain technology and supply chain finance, there are still some problems. Blockchain companies, technology platforms, core enterprises, and financial institutions still face the problem of data sharing, and there is a trend of independent development, which is difficult to form. The trend of starting a prairie fire.
In addition, as the underlying technology, the development and application of blockchain in the supply chain field is also facing the impact of other technologies. Consulting firm KPMG and supply chain software company JDA released an annual survey in May. The survey asked corporate executives which technologies would have the greatest potential impact on the supply chain in the future and were most likely to be adopted. The results showed that cognitive analysis and artificial intelligence ranked high, and blockchain declined year-on-year.
In this case, blockchain technology wants to play a greater role in supply chain finance. Perhaps digital currency and cross-border trade are two important turning points.
This month The Economist publishes a series of articles on the transformation of global supply chains. The article pointed out that the current global supply chain is shortening and has higher requirements for speed. As global supply chains become shorter and faster, the requirements for the movement of funds must also increase. In addition, the high tariffs brought about by the trade war have also brought greater cash flow pressure on suppliers. As the supply chain is the core mechanism of globalization, the financing demand in cross-border trade will also be stronger.
Prior to this, the central bank and the State Administration of Foreign Exchange have taken the lead in deploying cross-border trade services, using blockchain technology to provide financial services for international supply chains.
On September 4, 2018, the Digital Currency Research Institute of the People's Bank of China launched the "Bay Area Trade Finance Blockchain Platform", which aims to carry out activities such as accounts receivable and trade financing. As of May this year, the platform has developed a total of 4 applications, connected to 26 banks, generated more than 17,000 transactions, achieved more than 4 billion total financial transactions, and has a number of patents. Now, the central bank's trade finance blockchain platform should chain accounts receivable financing has also launched the first phase of trial operation.
On March 22, 2019, the State Administration of Foreign Exchange, as the initiator, built a cross-border trade service platform, and has now opened the business scenarios of "export receivables financing (after delivery)" and "authorization and verification of cross-border credit information of enterprises" .
In addition to blockchain technology can help expand the supply chain financial market in international trade, Wal-Mart’s recent behavior of issuing coins shows that digital currency based on blockchain technology may play a role in supply chain finance.
On August 1, Wal-Mart’s digital currency patent was announced. Wal-Mart Coin WNT can connect all links of the supply chain with Wal-Mart as the core. If Wal-Mart partners accept WNT, they can use WNT to purchase goods from Wal-Mart or convert it into cash. Similarly, consumers can also use WMT to consume in WMT issuers and partner institutions in exchange for goods and services.
In the supply chain planned by Wal-Mart, the flow of funds is replaced by WNT to a certain extent, which means that Wal-Mart will have greater control over the flow of funds. Similarly, it can also achieve the effect pursued by supply chain finance—relaxing the capital constraints of core enterprises and ensuring the capital flow of suppliers and distributors.
