XDC Network, a highly interoperable, hybrid blockchain platform that supports global trade and finance, is honoured to have been selected as the first blockchain company to join the globalTrade Finance Distribution (TFD) Initiative, a consortium of trade originators, credit insurers, and institutional funders on a mission to boost automation and transparency in trade asset and risk distribution.
XDC Network was selected to join the TFD Initiative by fintech veteranAndré Casterman, whose impressive track record includes over 20 years at SWIFT, leading various technology innovations in inter-bank payments, corporate payments, corporate treasury, and trade finance. Casterman is responsible for spearheading the TFD Initiative.
In welcoming the XDC Network, Casterman, who is also Chair of the Fintech Committee at International Trade and Forfaiting Association (ITFA), said: “TFD Initiative provides the most comprehensive set of trade distribution capabilities. We welcome XinFin’s XDC Network to TFD Initiative as this enables us to bridge the US$19 trillion trade finance asset class with any type of funder through tokenisation and digital assets.”
To establish trade as an investment class, TFD Initiative is working to define new technology-based market practices and transaction data specifications, with the goal of increasing the accessibility and transparency of trade flows. This will create a more robust trade finance ecosystem where banks can reach new types of funders, like institutional investors and family offices.
The TFD Initiative, whose members include major global financial institutions and leading service providers such as ABN AMRO, Santander Asset Management, ING Bank, SMBC, ANZ, Commonwealth Bank of Australia, Texel Group, NN Investment Partners and more, recognises the vital role blockchain will play in shaping the future of the trade finance sector, which has already been successfully implemented in other areas of finance.
A first-of-its-kind, public-private hybrid blockchain platform, XDC Network brings energy-efficient smart contract and digital asset technology to the trade investment class.
Chris Southworth, Secretary General, ICC United Kingdom who is an observer on TFD Initiative said: “Trade finance is a compelling asset class for institutional investors. Making trade finance more accessible for non-bank investors is of paramount importance if we are going to drive the economic recovery from Covid and fill the USD 3-5 trillion SME trade finance gap. Innovative technology driven solutions like the TFD Initiative are a critical part of the solution to providing more liquidity into the market.”
Leveraging the power of cryptographic tokens, the XDC Network allows for the digitisation, tokenisation, and swift settlement of trade transactions, reducing reliance on complex foreign exchange infrastructures. Some of the key advantages include lower transaction fees (near zero), less energy consumption, efficient confirmation time, double validation, and randomisation for security guarantees.
“Utility networks, like the XDC Network, will help lay the tracks for a new digital economy and develop standards for tokenized trade finance distribution, giving organizations increased exposure to emerging markets. XDC brings new sources of liquidity, via our smart contract technology to global trade finance. Joining TFD Initiative enables us to work closely with a series of bank and non-bank originators and contribute to closing the SME financing gap,” says Atul Khekade, co-founder of XDC Network.
“Emerging technologies such as distributed ledgers are being promoted as a way to createsmart contracts: computer programs which run automatically, in whole or in part, without the need for human intervention,” says Sarah Green, Law Commissioner for England and Wales. “Smart contracts are expected to increase efficiency and certainty in business and reduce the need for contracting parties to have to trust each other; the trust resides instead in the code. To ensure that the jurisdiction of England and Wales remains a competitive choice for business, there is a compelling case for reviewing the current legal framework in England and Wales to ensure that it facilitates the use of smart contracts.”
An initial set of SME-focused supply chain finance platforms powered by XDC on the back of the TFD Initiative will be announced in the coming weeks.
As an enthusiast deeply entrenched in the world of blockchain technology and finance, I've closely followed the developments in the industry, and my expertise extends to understanding the nuances of various blockchain platforms. Now, let's delve into the concepts used in the provided article about XDC Network and its participation in the global Trade Finance Distribution (TFD) Initiative.
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XDC Network:
- XDC Network is described as a highly interoperable, hybrid blockchain platform.
- It supports global trade and finance, showcasing its versatility and applicability on a global scale.
- It is recognized as the first blockchain company to join the global Trade Finance Distribution (TFD) Initiative.
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Trade Finance Distribution (TFD) Initiative:
- TFD Initiative is a consortium comprising trade originators, credit insurers, and institutional funders.
- The mission of TFD Initiative is to enhance automation and transparency in trade asset and risk distribution.
- It aims to define new technology-based market practices and transaction data specifications to increase accessibility and transparency in trade flows.
- The TFD Initiative seeks to establish trade as an investment class.
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André Casterman:
- André Casterman, a fintech veteran, with a track record of over 20 years at SWIFT, is responsible for spearheading the TFD Initiative.
- He is also the Chair of the Fintech Committee at the International Trade and Forfaiting Association (ITFA).
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Blockchain's Role in Trade Finance:
- Blockchain is recognized as a vital technology in shaping the future of the trade finance sector.
- The TFD Initiative acknowledges the significance of blockchain in increasing accessibility and transparency in trade flows.
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XDC Network's Features:
- XDC Network is described as a first-of-its-kind, public-private hybrid blockchain platform.
- It brings energy-efficient smart contract and digital asset technology to the trade investment class.
- The platform leverages cryptographic tokens for the digitization, tokenization, and swift settlement of trade transactions.
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Leveraging Cryptographic Tokens:
- XDC Network enables the digitization and tokenization of trade transactions.
- It allows for swift settlement, reducing reliance on complex foreign exchange infrastructures.
- Key advantages include lower transaction fees (near zero), less energy consumption, efficient confirmation time, double validation, and randomization for security guarantees.
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Importance of Trade Finance for Institutional Investors:
- Chris Southworth, Secretary General, ICC United Kingdom, emphasizes the significance of making trade finance more accessible for non-bank investors.
- Trade finance is considered a compelling asset class for institutional investors, crucial for driving economic recovery and addressing the SME trade finance gap.
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Smart Contracts and Legal Framework:
- The article mentions smart contracts as computer programs that run automatically without human intervention.
- Sarah Green, Law Commissioner for England and Wales, highlights the potential of smart contracts to increase efficiency and certainty in business.
- There is a call to review the legal framework in England and Wales to ensure it facilitates the use of smart contracts.
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Future Developments:
- An initial set of SME-focused supply chain finance platforms powered by XDC on the TFD Initiative will be announced in the coming weeks.
In conclusion, the integration of XDC Network into the TFD Initiative represents a significant step toward advancing automation and transparency in global trade finance, leveraging blockchain technology and smart contracts to create a more accessible and efficient trade finance ecosystem.
