Blockchain for Credit Insurance in Trade Finance

“Fluent plans to utilize the Single Invoice Cover, a first of its kind API-based, real-time credit insurance tool powered by Euler Hermes. The Single Invoice Cover was created to reinforce value propositions to supply chain finance platforms. It allows a user to instantly purchase credit insurance against the non-payment of a given invoice within the Fluent Trade Asset Marketplace.”

Fluent Network is a Fintech using Blockchain in ecommerce.

What other innovation are you hearing about in Trade Finance?

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in my opinion the true and complete innovation in trade finance must involve the integration of trade credit in the mediation of transactions and not a post transaction synapse event that seeks settlement and record management. Trade finance must be secured prior to the transaction completed especially if there are discrepancies between the value preferred by the best buyer prospect and the value specified by the best seller prospect. Trade credit loan to the buyer to cover invoice payable or factor to cover invoice receivable is part of the automatic mediation an intelligent platform must provide. The issue is not blockchain but the cyclical cycle of B2B transactions and this requires tradetech to deal with market behavior! As far as coverage of the trade agreement is concerned this must also be provided before hand as part of the trade contract and involves 1) deposit insurance provided by both counter parties (I have worked the complex math required for this!), 2) platform ability to substitute an order default with an invitation/acceptance of an alternative and qualified counter party customer and 3) a trade swap derivative to cover unanticipated forward default of contract terms. All these are part of the system that my team is developing based on my mathematical and stochastic models.

@takiecon Yes. Trade Finance has been a cash cow for banks because it combines two transactions in one

  • credit - short term, asset backed, self liquidating

  • FX - if it is cross border

In a ZIRP world a lot of investors want those short term, asset backed, self liquidating assets and the FX part is easily unbundled.

Yes Bernard, a lot of investors want these…although my comment was about a different dynamics of innovation for this issue.