Azgari Lipshy writes about technology, yoga and her solo travels around the world. She is a degreed quota-carrying technology industry sales and account management professional with progressive territory growth for enterprise and channel sales.

1. Blockchain in Supply Chain Finance (SCF)
What is Blockchain?
When people think about blockchain, the first thing that immediately comes to mind is
digital currencies. Blockchain, on the other hand, is significantly more valuable and has
the potential to revolutionize numerous sectors. It is a distributed digital ledger shared
by all participating systems (nodes). Every transaction in the network is recorded in the
ledger, which greatly increases transparency. For the key stakeholders, the nexus of
supply chain finance with blockchain technology presents considerable benefits.

2. Blockchain in Supply Chain Finance (SCF)
Contemporary Supply Chain Finance System and Its Challenges
In the present context, where the Covid-19 pandemic has shown the flaws in the supply chain
financing and trade systems that are currently in use, digital transformation with blockchain
promises to reduce the friction in global commerce. Blockchain technology enables supply chain
finance solutions to improve by lowering inefficiencies and enhancing visibility between
stakeholders; these issues have been the key obstacles in supply chain finance.
Companies were already evaluating the potential of blockchain to update some components of
their supply chains before the COVID-19 outbreak. Traditional supply chains are typically
characterized by cumbersome paperwork, contradicting records, and delays brought on by
manual reconciliation processes requiring actions and document exchanges among several
parties, which may also be inefficient, data-intensive, and expensive.
Supply Chain Finance (SCF) is a crucial but largely underappreciated application of blockchain
technology. The European Commission calculated that the financing of trade transactions was
worth USD 10 trillion in 2017 alone. Trade and SCF are required for up to 80% of global trade
transactions to provide liquidity and reduce risk. SCF encompasses several approaches and
practices for optimizing the working capital involved in supply chain transactions. However, the
trade and supply chain financing industry's inherent dependence on paper-based data has
increased costs and led to inefficiencies.

3. Blockchain in Supply Chain Finance (SCF)
Benefits of Blockchain in Supply Chain Finance
Authenticity in The Supply Chain
The supply chain financing industry is a vast network with many different stakeholders. There are
numerous interested parties, from buyers to suppliers to middlemen, and the information flow is
not always clear. Each stakeholder may put their interests ahead of those of other stakeholders,
resulting in delays in the supply chain.
This issue can be resolved using blockchain. The stakeholders who have access to the same data
are given copies of the same digital ledger, which maintains the records in the network.
Blockchain's immutability eliminates misunderstandings and guarantees the network's validity
and transparency.
Inclusivity in The Supply Chain Ecosystem
There are flaws in the current supply chain finance environment, particularly regarding financial
inclusion. The top 10 to 50 suppliers often receive funding from supply chain financiers, cutting
out many small and medium-sized businesses. A smaller group of suppliers might gain more from
immediate payment with buyer-led supply chain finance than their counterparts; therefore, this is
unfair.

4. Blockchain in Supply Chain Finance (SCF)
Redefines Supply Chain Financiers
In buyer-led supply chain financing, financial firms are often the financiers. They are in
charge of paying the suppliers' invoices. Buyers repay them via a repayment schedule
that includes the borrowed amount plus a little charge and interest.
While financial institutions will always be important in buyer-led supply chain finance,
blockchain may make the system more accessible to ecosystem participants. Individual
investors and corporate foundations alike might benefit financially from supply chain
finance. Platforms are already using blockchain to enable various lenders to use supply
chain financing to generate profits.
Enhances Supply Chain Sub-Operations
Information sharing is a problem if there are several parties involved. A similar problem
has plagued supply chain financing. In reality, information inaccuracy is one of the
main reasons supply chain finance has struggled to address the enduring problems in
the supply chain.

5. Blockchain in Supply Chain Finance (SCF)
Conclusion
Technology like blockchain appears to have earned a place in the next digital revolution
as society progresses toward the center of the 4th industrial revolution, which is defined
by more use of automation, IoT, big data, smart solutions, and data exchange.
Although blockchain technology is still relatively new, it has already proven useful in
various contexts. The great value of blockchain has already benefitted the industries of
entertainment, finance, and payments, and it will continue to do so in the years to come.
It is thus just a matter of time before blockchain technology merges with supply chain
finance and significantly enhances it.
About The Author
Azgari Lipshy writes about technology, yoga and her solo travels around the world.
She is a degreed quota-carrying technology industry sales and account management
professional with progressive territory growth for enterprise and channel sales. She is
an annual achiever that has worked as both an individual contributor key account
manager and sales organization team leader.

6. Blockchain in Supply Chain Finance (SCF)
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