Editor's Note: This article comes fromInterchain Pulse (ID: HiveEcon)Editor's Note: This article comes from

Interchain Pulse (ID: HiveEcon)

Interchain Pulse (ID: HiveEcon)

When a country raises a big stick and tries to decouple its allies from China. The power from business organizations is using blockchain to strengthen business transactions.

During the 6.18 shopping festival that just passed, Cargill from the United States sold antibiotic-free chicken products on Tmall and JD.com through the China National Animal Health and Food Safety Innovation Alliance (CAFA) food trust and traceability platform. The food trust traceability platform was officially launched in April this year, which shows that the platform has cooperated with overseas institutions to serve China's open economy.

In fact, one blockchain industry alliance after another is beginning to reshape the global trade system, some are led by Chinese institutions, and some are led by overseas institutions to join Chinese companies. Because of the addition of blockchain and other technologies, it has to a certain extent got rid of the trust system established by international organizations and national institutions in trade, and used a new model to trade.

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Chinese companies join cross-border alliances

In May of this year, Baosteel Co., Ltd., a subsidiary of China Baowu Iron and Steel Group, and Australia's Rio Tinto Group completed the first full-process, point-to-point and banknote-free RMB iron ore settlement transaction using blockchain technology, with a total amount of more than 100 million yuan. This is another new progress of Baosteel after completing the first RMB cross-border settlement with Brazil's Vale and Australia's BHP Billiton in January and April this year respectively.

So far, Baosteel has completed the cross-border RMB settlement with the world's three major iron ore giants.

This cross-border settlement transaction was completed on the blockchain trade financing platform Contour, supported by Chinsay, a cloud platform for point-to-point management of global commodities and freight contracts, essDOCS, a paperless trade solution development company, DBS Bank of Singapore, and Standard Chartered Bank. Serve.

The most important breakthrough of these transactions of Baosteel Co., Ltd. is to bypass SWIFT through blockchain technology. As we all know, SWIFT's standard message format has become the standard language for data exchange between international banks. Its partners are located in 206 countries and regions around the world, connecting more than 8,000 financial institutions, and supporting real-time payment and settlement in more than 80 countries and regions.

But SWIFT is controlled by the US government. In March 2012, under the threat of the United States, SWIFT canceled the membership of Iranian financial institutions blacklisted by the United States. This has to make people suspect that in extreme cases, the United States will do the same to other countries.

In addition to finance, food security is also being solved with blockchain. In April of this year, China's largest grain, oil and food company - COFCO, together with Bunge, Cargill, Louis Dreyfus, and Glencore Agriculture, established a joint venture named Covantis S.A (Novartis SA) in Geneva, Switzerland. Digital Agriculture International Trading Company. Covantis S.A expects to increase transaction speed by around 70% by replacing manual processes with electronic automation, while also reducing error rates.

According to insiders of COFCO, this will make it more convenient and efficient for China to import agricultural products from all over the world, and at the same time reduce international public opinion's concerns and doubts about China's food security situation. Covantis S.A has completed trade testing of soybeans shipped to China from the port of Santos, Brazil.

This grain alliance is also formed among commercial organizations, and in the process, many intermediate processes of the existing grain trade are simplified or replaced, and even political interference is involved. As long as the alliance builds mutual trust, business can be done.

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Cross-border alliances built by Chinese institutions

In addition to joining the blockchain industry alliance led by overseas institutions. More and more Chinese blockchain industry alliances are also expanding cooperation with overseas countries.

For example, China National Animal Health and Food Safety Innovation Alliance Food Trust and Traceability Platform. Another well-known one is the People's Bank of China Trade Finance Blockchain Platform (referred to as the Central Bank Trade Finance Platform) developed by the Central Bank Monetary Research Institute. The latest data found is that as of mid-January 2020, 44 banks and 485 outlets have participated in the promotion and application, and 1,898 companies have generated business. The accumulated business volume exceeds RMB 90 billion.

This platform is also strengthening international cooperation. In November last year, a subsidiary of Hong Kong Interbank Clearing Co., Ltd. and a subsidiary of the People's Bank of China's Digital Currency Research Institute signed a "Memorandum of Understanding" to conduct a proof-of-concept test, aiming to connect "Trade Linkage" with the People's Bank of China's trade finance platform . After the docking is completed, it will provide more convenient trade financing services for enterprises in the two places, and it will also speed up the expansion of Hong Kong banks' financing business.

It is worth noting that Hong Kong's "Trade Linkage" has also connected with some international blockchain trade platforms. In October 2018, "Trade Linkage" signed a "Memorandum of Understanding" with the European blockchain trade financing platform we.trade to conduct a "concept proof" on the docking of the two platforms.

We.trade is a platform provider that provides companies with end-to-end capital flow tracking and transaction management. Deutsche Bank, HSBC, Union Bank of Belgium, Natixis Bank, Nordea Bank, Rabobank, Santander and Société Générale Jointly established with UniCredit Bank. In May of this year, the US technology giant IBM announced that it invested in the blockchain-based European trade financing platform we.trade as part of an upgraded cooperation.