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SBI partners with UAE’s TradeFinex to establish a collaborative cryptocurrency initiative in Japan.
SBI Holdings and TradeFinex aim to enhance the adoption of the Ethereum Virtual Machine-compatible enterprise blockchain XDC Network through a new collaborative venture in Japan.
TradeFinex, a company based in the United Arab Emirates, operates its own decentralized platform on the XDC Network, facilitating connections for trade finance originators with various banks and lending institutions. Focused on enterprise applications, TradeFinex primarily offers blockchain-based trade finance solutions, such as invoicing, letters of credit, purchase order financing, and supply chain financing.
A visual depiction of TradeFinex’s trade finance framework. Source: TradeFinex.
The XDC Network is an EVM-compatible layer-1 network featuring interoperable smart contracts. Its documentation characterizes the protocol as a “highly optimized, bespoke fork” of Ethereum, utilizing a delegated proof-of-stake (DPoS) mechanism to achieve rapid transaction speeds, minimal gas fees, and a high capacity for transactions per second.
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XDC operates with its native XDC token, which functions as a reserve cryptocurrency for third-party decentralized applications (DApps) on the network. The token is designed for various applications, including DApp payment settlements, micropayments, transaction fees, and smart contract deployment and settlement.
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TradeFinex has engaged in partnerships with the World Trade Organization, the International Chamber of Commerce, and several government entities to investigate blockchain as a method to enhance the speed, transparency, costs, and traceability of trade finance.
A report from the World Trade Organization in 2020 recognized TradeFinex as a network that functions “as both permissioned and permissionless: permissionless for public verification, but permissioned for selective data sharing.”
At the time of the report, several participants were utilizing TradeFinex, including Validus, Enigio, Ramco, and the International Trade and Forfaiting Association, among others.
An announcement shared with Cointelegraph detailed the objective of the joint venture to localize XDC Network information and documentation in Japan, distribute XDC tokens to local cryptocurrency exchanges, and implement trade finance solutions throughout the Asia-Pacific region.
The establishment of the joint venture follows recent reports indicating that the Japanese government plans to allow startups to raise funds through the issuance of cryptocurrency tokens rather than traditional stock listings.
Japan’s Financial Services Agency also revealed its intentions to revise its tax code concerning cryptocurrencies in August 2023 to adopt a more proactive stance in cryptocurrency regulation. This may involve exemptions from the tax on “unrealized gains” on cryptocurrencies.
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