Singapore-based blockchain protocol eXchange inFinite (XinFin) and trade finance distribution platform Tradeteq today announced their partnership to tokenize trade finance assets into non-fungible tokens (NFTs), according to a company statement shared with Forkast.News.
- Atul Khekade, co-founder of XinFin, told Forkast.News in an interview that traditional trade finance assets that are typically paper-based such as invoices or a letter of credit would be digitized, tokenized into NFTs and brought on-chain using XDC Network’s enterprise-grade blockchain technology, with Tradeteq repackaging and distributing the assets to institutional investors. Bringing these traditional real-world assets onto the blockchain will help build a decentralized finance (DeFi) ecosystem based on something tangible in real value, Khekade said.
- The first transaction was conducted on Sept. 20, with invoice finance company Accelerated Payments as the asset originator, the statement said. Additional originators expected to join the platform over the coming weeks.
- “The collaboration between XinFin, Tradeteq and Accelerated Payments completes the chain from investor right through to the recipient of funding with complete transparency, accountability and liquidity,” said Ian Duffy, founder and CEO of Accelerated Payments. “This important step demonstrates the ability to disaggregate the Invoice Discounting industry and paves the way to providing access to a much wider range of funders and beneficiaries, providing a platform that can truly scale globally.”
- Trade finance — the financing of import and export transactions — is a critical part of global trade. However, small and medium-sized enterprises often face challenges obtaining trade finance, and the largely paper-based trade processes are fraught with inefficiencies. According to the International Chamber of Commerce (ICC), the estimated global trade finance gap of US$1.5 trillion is projected to grow to US$2.5 trillion by 2025. Digital trade is widely seen as a key enabler to help banks close the trade finance gap, the ICC said. Initiatives to digitize trade finance and leverage on blockchain technology are on the rise. Earlier this month, three banks — the Bank of China, Singapore’s DBS and HSBC — announced their partnership with Hong Kong-based Global Shipping Business Network (GSBN) to form a trade finance advisory group that aims to bridge the financing gap by helping partner organizations digitize and improve their existing processes using blockchain technology.