Chinese Tech Giant Tencent To Develop Blockchain Supply Chain Finance Platformbr>
Tencent FiT, a division of Chinese media and tech giant Tencent, is creating an open supply chain finance platform based on blockchain technology.
Established in 2015, Tencent FiT provides online and mobile financial transaction services to businesses and individuals worldwide through the WeChat Wallet and other systems backed by the Tenpay online payment service.
Aaron Cai, general business manager of Tencent Blockchain, announced that the company has partnered with Chinese supply chain finance firm Linklogis to develop the platform. Called WeChain, the platform will reportedly enable enterprise clients to operate through mobile devices based on WeChat platform.
“We want to build WeChain as a supply chain finance service platform based on blockchain technology,” said Cai. “The platform will empower medium and small-sized enterprises, helping them to get out of the financing predicament.”
Supply chain finance (SCF) refers to credit given to the small- and medium-sized enterprises that act as suppliers to a large blue-chip buyer. Many industry players believe that blockchain can solve some of SCF’s problems as the technology makes data credible and transparent and the transaction settlement more efficient, thus optimizing financing.
“Different from the traditional supply chain finance, the new platform incorporating blockchain could spread a core enterprise’s good credit to each level of the industrial chain, which is extremely beneficial for small and middle-sized enterprises,” said Ji Kun, Managing Director of Linklogis.
China’s supply chain finance market is projected to see an annual growth rate of 4.5 percent to 5 percent in the next two years, reaching 15 trillion yuan ($2.16T USD) in 2020, according to statistics from auditing firm PwC.