Abstract
High level of standardisation and transparency could be a strong enabler for SCF programmes. Blockchain-driven documentary trade processing could become the catalyst to establish a fully straight-through process (STP), supporting the programme setup until the key day-to-day operations. The benefits of an application of BCT range from cost-effective securities settlement, which makes the investment in payables asset class more attractive, to cost-effective onboarding processes through shared trusted KYC registry. Other benefits could arise from a faster invoice approval, clear title of ownership and invoice validity, as well as from faster and cheaper payment systems.
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Notes
- 1.
In practice, however, some bank typical KYC requirements need also be applied to SPVs because some bank’s compliance rules might demand the same diligence for the SPV’s KYC process as if performed by the bank itself.
- 2.
Various private or consortium projects such as the Corda R3, Nasdaq Linq, Digital Asset Holding or SETL.io are addressing this specific financial application.
- 3.
In the case of a new customer or poor payment history, suppliers usually request payment before shipping (Magal and Word 2011, pp. 5–39).
- 4.
A full list can be found on http://www.bitcoinvalues.net/who-accepts-bitcoins-payment-companies-stores-take-bitcoins.html.
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Hofmann, E., Strewe, U., Bosia, N. (2018). Concept—Where Are the Opportunities of Blockchain-Driven Supply Chain Finance?. In: Supply Chain Finance and Blockchain Technology. SpringerBriefs in Finance. Springer, Cham. https://doi.org/10.1007/978-3-319-62371-9_5
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