The 2016 Fintech Global Summit has given rise to the founding of the ‘Blockchain Application Sub-Committee’, initiated of the China Federation of Logistics & Purchasing. It has been learned that the Sub-Committee was initiated by a blockchain start-up Shenzhen Digital Singularity Ltd, logistics companies and financial institutions. The Sub-Committee will be focusing on the promotion of blockchain technology in logistics by introducing blockchain technology and business training, R&D standards of blockchain for logistics, and blockchain-based company credit mechanism alongside the total upgrading and re-direction of the logistics supply-chain industry.
Liu Yang, CEO of Shenzhen Digital Singulariy Ltd, commented on the high accountability, anti-counterfeiting ability and immutability provided by blockchain and how, in the financial sector, the application of the technology is witnessing a mandatory trend. Yang noted that problems like the loss and mistakes of cargo delivery require powerful tracing ability and that blockchain technology can perform well for logistics to combat such weaknesses in the system.
Shenzhen Digital Singularity Ltd previously was focussed on Bitcoin, but this has resulted in the development of R&D capabilities with blockchain technology. For the Sub-Committee, Digital Singularity will be the only blockchain technology provider, responsible for the making of standards. Yang will also run for the presidency of the standard committee; he expressed the wish to promote the standard-making in the industry as well as to provide comprehensive blockchain solutions that are capable of addressing real problems in cooperation with traditional logistics and procurement companies.
Leveraging blockchain technology is particularly expected to benefit the upper stream of the supply-chain which mostly consists of small and mid-sized companies with low credit ratings. These types of company have regular issues in procuring funding by banks which in turn impacts on the rest of the supply chain. Blockchain can be served to tag and anchor the credit rating of supply chain companies and can help solve issues like On-Credit orders which are big concerns for the industry where upper stream companies cannot have timely payment from big companies.
Yang believes that in the near future, the perfect combination of blockchain technology and logistics industry will tackle the financial hindrances in logistics, and significantly improve the efficiency.