Earlier this month, Standard Chartered announced it had made a strategic investment in Linklogis, a blockchain-powered supply chain finance platform based in Shenzhen, China.
The bank initially announced it intended to work with Linklogis in February last year and revealed its first transaction six months ago.
As with most supply chain investment solutions, the key advantage is for smaller and medium-sized suppliers who obtain access to finance because the platform reduces the financing risk. The larger enterprise buyers that bring their suppliers onboard these platforms are ordinarily a client of a bank who grants the funding.
By adopting the solution, banks have greater trust in financing the suppliers. The bank leverages its understanding of the buyer and its credit history. They have a record that the invoice is authentic and visibility into the underlying transaction. For the consumer, there is improved transparency for its supply chain.
“Our strategic investment into Linklogis not only allows us to better serve our clients by being a part of their integrated ecosystem, it also reinforces our efforts to support China’s opening by facilitating the flow of capital, particularly for the Greater Bay Area,” stated Benjamin Hung, Regional CEO for Greater China & North Asia at Standard Chartered.
There’s competition in that area, with a central bank-backed trade finance initiative targeting that area, the Bay Area Trade Finance Blockchain.
The Linklogis platform utilizes WeQChain, which is based on Tencent’s TrustSQL technology.
Before the Standard Chartered investment, where the price was not revealed, to date, Linklogis had accumulated more than $260 million in the capital. The firm originated in 2016, and China’s Tencent was the first investor and engaged in all three funding rounds.
Linklogis obtained $220 million in a ‘Series C round’ in late 2018 managed by the Singapore Government Investment Corporation (GIC) with big profile investors, including the investment arms of CITIC, Tencent, Bertelsmann Asia, and China Merchants Bank, and others.
CMB and CITIC are both privately owned and the only two Linklogis stockholder banks apart from Standard Chartered. They may not be the largest banks in China at approximately ninth and tenth spots but are still very big.
Additionally, various other Chinese banks are strategic partners, including the largest bank in the world, Industrial and Commercial Bank of China (ICBC). Aside from shareholders, other banking partners include Suning Bank, CICC, Bank of Langfang, Huaxia Bank, SPD Bank, Bank of Shanghai, China Mingsheng Bank, and Nanyang Commercial Bank (NCB).
In other news, Standard Chartered declared that Michael Spiegel has joined from Deutsche Bank as Global Head of Trade.
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