Today Sinochem unveiled its new warehouse receipt blockchain, which integrates internet of things (IoT). The state-owned firm is one of the largest oil producers in China.
The first transaction was for oil trader Beijing Longrun Kaida Petrochemical Products, which received a warehouse receipt from Nanchu Management Group. That receipt was then used to secure trade finance from China Construction Bank. The benefit is same-day financing and a 40% reduction in cost.
There have been numerous trade finance scandals where bills of lading or warehouse receipts have been used to raise finance from more than one bank. In 2014 at China’s Qingdao Port there was a significant fraud of 12.3 billion yuan ($1.83bn) that included fake metal warehouse receipts and another 3.6 billion yuan ($530 million) relating to shipping cargo. In Singapore, at least three commodities houses have collapsed this year, and fraud is also alleged in those cases.
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