SBI Collaborates with TradeFinex to Establish Joint Crypto Venture in Japan
SBI Holdings and TradeFinex have joined forces to establish a new joint venture in Japan, aiming to promote the adoption of trade finance on the Ethereum Virtual Machine-compatible enterprise blockchain XDC Network.
TradeFinex, based in the United Arab Emirates, operates a decentralized platform on the XDC Network for trade finance originators to connect with various banks and lending institutions. The platform primarily offers blockchain-based trade finance products, including invoicing, letters of credit, purchase order finance, and supply chain finance, catering to enterprise use cases.
The XDC Network is a layer-1 network that is compatible with the Ethereum Virtual Machine (EVM) and supports interoperable smart contracts. It is described as a “highly optimized, bespoke fork” of Ethereum and utilizes a delegated proof-of-stake (DPoS) mechanism to achieve fast transaction times, low gas fees, and high transaction per second capacity.
The native cryptocurrency of XDC Network is XDC token, which serves as a reserve cryptocurrency for third-party decentralized applications (DApps) running on the network. The token is designed to be used for various purposes, including DApp payment settlements, micropayments, transaction costs, and smart contract deployment and settlement.
TradeFinex has been actively exploring blockchain technology in collaboration with organizations such as the World Trade Organization, the International Chamber of Commerce, and government agencies. The aim is to enhance the speed, transparency, cost-effectiveness, and traceability of trade finance.
In a report by the World Trade Organization in 2020, TradeFinex was recognized as a network that operates as both permissioned and permissionless, allowing public verification while selectively sharing data.
The joint venture aims to localize XDC Network information and documentation in Japan, distribute XDC tokens to local cryptocurrency exchanges, and deploy trade finance solutions across the Asia-Pacific region. This initiative follows recent reports that the Japanese government plans to allow startups to raise funds through the issuance of cryptocurrency tokens instead of conventional stock listings.
The Financial Services Agency of Japan also announced its intention to amend the tax code related to cryptocurrencies in August 2023 to take a more proactive role in cryptocurrency regulation. This could potentially include exemptions from paying “unrealized gains” tax on cryptocurrencies.
Source: Cointelegraph
The Collaboration Between SBI Holdings and TradeFinex
SBI Holdings, a major financial conglomerate in Japan, and TradeFinex, a UAE-based firm, have partnered to establish a joint venture in Japan. The primary objective of this collaboration is to encourage the adoption of trade finance on the XDC Network, an Ethereum Virtual Machine-compatible enterprise blockchain.
TradeFinex operates a decentralized platform on the XDC Network, providing trade finance solutions to connect trade originators with banks and lending institutions. Their platform offers a range of blockchain-based trade finance products, including invoicing, letters of credit, purchase order finance, and supply chain finance, catering specifically to enterprise use cases.
The XDC Network: A Powerful Layer-1 Solution
The XDC Network is a layer-1 network that is compatible with the Ethereum Virtual Machine (EVM). It is designed to support interoperable smart contracts, providing increased flexibility and efficiency for trade finance use cases. Compared to traditional financial systems, the XDC Network offers faster transaction times, lower gas fees, and higher transaction per second capacity.
Advantages of the XDC Token
The XDC token is the native cryptocurrency of the XDC Network. It serves as a reserve cryptocurrency for third-party decentralized applications (DApps) running on the network. The XDC token can be utilized for various purposes, including payment settlements, micropayments, transaction costs, and smart contract deployment and settlement.
Promoting Blockchain in Trade Finance
TradeFinex has been actively collaborating with prominent organizations such as the World Trade Organization, the International Chamber of Commerce, and government agencies to explore the potential of blockchain technology in trade finance. By leveraging the secure and transparent nature of blockchain, TradeFinex aims to enhance the efficiency, transparency, and traceability of trade finance processes.
The Joint Venture’s Goals in Japan and the Asia-Pacific Region
The joint venture between SBI Holdings and TradeFinex has set clear goals to promote the usage of the XDC Network in Japan and across the Asia-Pacific region. These goals include:
- Localizing XDC Network information and documentation in Japan to facilitate adoption among businesses and financial institutions
- Distributing XDC tokens to local cryptocurrency exchanges, making them more easily accessible for users and investors in Japan
- Deploying trade finance solutions based on the XDC Network across the Asia-Pacific region, fostering economic growth and facilitating cross-border transactions
The Future of Cryptocurrency Regulation in Japan
Japan has been at the forefront of cryptocurrency regulation, continuously adapting its policies to foster innovation while ensuring consumer protection. The country’s Financial Services Agency has announced plans to amend the tax code related to cryptocurrencies, potentially introducing exemptions from paying “unrealized gains” tax. This proactive approach demonstrates Japan’s commitment to embracing and regulating the cryptocurrency industry.
Editor’s Notes
The collaboration between SBI Holdings and TradeFinex to establish a joint crypto venture in Japan is a significant development in the adoption of blockchain technology in trade finance. By leveraging the XDC Network’s capabilities, businesses and financial institutions in Japan and the Asia-Pacific region can benefit from enhanced efficiency, transparency, and security in their trade finance processes.
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