“Did you know that the most “recent” innovation in international trade is actually CONTAINERS?” Mr. Yi Qing, CEO of SilkChain at the Mauritius Blockchain Conference during his speech.
It is an undeniable fact that international trade is one of the biggest industries of our time, well, not only our time as it has really been big since its inception 5 centuries ago. The UK, France and Holland were actually the first countries to “promote” this activity. When international trade started, it was meant to help potential traders find overseas markets, sell goods, find buyers, earn money and promote economic systems of their own countries. As much as we cannot deny that those advantages have been realisable, we can’t blind ourselves from the fact that there is lack of trust in the whole system;
“There is lack of trust in the system, especially in SME’s, as people do not trust each other generally. This is especially in SME’S as buyers and sellers, and traders and service providers do not trust each other at all.” Mr. Yi Qing, CEO of SilkChain in an exclusive interview with Decentral Magazine.
So, what are the other major pain points in international trade?
In 2017, the total trade volume of world merchandise was close to $32 trillion; a value equivalent to the sum of China and USA’s GDP. Even with this large number however, it is quite crucial to realise that from 2008-2017, the total growth of international trade has slowed down significantly. Apart from trust barriers, SME’s are also unable to get letters of credit, thus causing an immense trade problem. Due to the aforementioned reasons, SME’s face difficulties in establishing trust among cross-border merchants, thus, it becomes difficult to get large and highly efficient transactions. Secondly, it is difficult to introduce financial leverage to merchants as financial institutions have had a hard time in carrying out credit investigations among these people.
In essence, the independent data structure, segregated data ownership, lack of publicly trustworthy safeguard mechanisms and a centralised IT system of the international trade industry are very fragmented. Consequently, there is no globally unified interconnection and there is definitely no trust whatsoever.
But first, why is trade important?
“China was very poor a long time ago, precisely, 30 years ago and the only prominent activity was agriculture. However, Chinese people started focusing on international trade and thus, many factories were set up at the coastal side of China. This activity provided jobs and attracted professional buyers from overseas, which made China richer. Moreover, manufacturers implemented technology and now, they have immense knowledge of the world and how to create such beneficial partnerships, thus international trade is very important for all developing countries.” Mr. Yi Qing, CEO of SilkChain in an exclusive interview with Decentral Magazine.
Essentially, if developing countries want to follow China’s lead, then international trade is their best option.
How is SilkChain Revolutionizing International Trade?
SilkChain is the first ever blockchain project dedicated to improving the international trade ecosystem. Why silk? Well, because silk represented the common currency in ancient international trade.
The blockchain technology is a good tool in solving the problems that exist in international trade. With that in mind, various major international business leaders headed by Osell Group, have come together to develop an organisation named International Trade Digitalization Commission (ITDC) with the purpose of making international trade seamless and empowering SME’s regarding this aspect. ITDC intends to use blockchain technology to promote DAO (Decentralized Autonomous Organization—a new generation of smart contract platform) within global industries, while experimenting in international trade. On top of its decentralized characteristic, the platform will promote global entities and simultaneously build a global merchant system. This will enable the platform to offer financial applications such as information storage, payment and liquidation, transparency within the supply chain, traceability and supply chain finance. The digital network platform is named SilkChain and the token issued is the Silk Token; which everybody can use through the various dApps available on the platform.
With this technology, SilkChain will be able to increase efficiency and cut transaction costs within the international trading industry.
So, what puts SilkChain at an advantage?
“As a company from China, in the last 16 years, we have always worked on setting up a platform for international traders, which is why we have the experience, ecosystem and clients who we are transferring to the blockchain platform.” Mr. Yi Qing, CEO of SilkChain in an exclusive interview with Decentral Magazine.
In essence, the team heading this has been in the international trade industry for 16 whole years, so they definitely know the ins and outs of this industry.
Are there any challenges?
According to Mr. Yi Qing, time is their biggest challenge. This is because Blockchain is growing fast and in China they say: “One day for blockchain, is equivalent to one day for other businesses.” He continued to mention that blockchain is the future and it grows really fast. This is also caused by the fact that they are trying to connect as many international traders as they can, thus they will be using a branch system, whereby they will create 400 nodes in the next three years, which is the main challenge.
How big is their community?
Thus far, they have 1 million people on Telegram and since China they use WeChat, they want to leverage it so that they get 10 million people in the next three years.
It’s really great to see blockchain technology making a difference in regards to industries that have not innovated in the longest time. It would really be interesting to see how it all comes to play, considering that it is aimed at mostly developing countries where receptivity is still a bit of an issue. However, this is one use-case to truly look out for.
This article is based on an exclusive interview between Decentral Magazine and Mr. Yi Qing of SilkChain during the Mauritius Blockchain Conference. This event took place on Monday, August 13th 2018 at the Intercontinental Hotel.