XDC Network, a hybrid blockchain platform for global trade and finance, has been selected as the first blockchain company to join the global Trade Finance Distribution (TFD) Initiative, according to a note from XDC.
The TFD Initiative is a consortium of trade originators, credit insurers, and institutional funders seeking to boost automation and transparency in trade asset and risk distribution.
XDC Network states that it was selected to join the TFD Initiative by André Casterman who worked for SWIFT for over 20 years leading various technology innovations in inter-bank payments, corporate payments, corporate treasury, and trade finance. Casterman is responsible for spearheading the TFD Initiative. Casterman is also the Chair of the Fintech Committee at the International Trade and Forfaiting Association (ITFA).
“TFD Initiative provides the most comprehensive set of trade distribution capabilities. We welcome XinFin’s XDC Network to TFD Initiative as this enables us to bridge the US$19 trillion trade finance asset class with any type of funder through tokenisation and digital assets,” Casterman said.
TFD Initiative is working to define new tech-based market practices and transaction data specifications, with the goal of increasing the accessibility and transparency of trade flows. The Initiative hopes to create a more robust trade finance ecosystem where banks can reach new types of funders, like institutional investors and family offices.
The TFD Initiative members include major global financial institutions and leading service providers such as ABN AMRO, Santander Asset Management, ING Bank, SMBC, ANZ, Commonwealth Bank of Australia, Texel Group, NN Investment Partners and more. Blockchain is recognized as a potential pathway to accomplish the group’s goals.
The XDC Network is said to allow for the digitization, tokenization, and settlement of trade transactions, reducing reliance on complex foreign exchange infrastructures. Key advantages include lower transaction fees, less energy consumption, efficient confirmation time, double validation, and randomisation for security guarantees.
Atul Khekade, co-founder of XDC Network, issued the following statement:
“Utility networks, like the XDC Network, will help lay the tracks for a new digital economy and develop standards for tokenized trade finance distribution, giving organizations increased exposure to emerging markets. XDC brings new sources of liquidity, via our smart contract technology to global trade finance. Joining TFD Initiative enables us to work closely with a series of bank and non-bank originators and contribute to closing the SME financing gap.”
XDC states that an initial set of SME-focused supply chain finance platforms powered by XDC will be announced in the coming weeks.