SBI XDC Network APAC and SS Trading Launch Initiative to Streamline Used Car Export Procedures and Establish Trade Finance Scheme Using Blockchain Technology

SBI XDC Network APAC Co., Ltd. (Headquarters: Minato-ku, Tokyo; Representative Director: Tomohiko Kondo; hereinafter “SBI XDC”) and SS Trading Co., Ltd. (Headquarters: Minato-ku, Tokyo; Representative Director: Takuma Shoda, hereinafter referred to as “SST”), have entered into a partnership to streamline export procedures for used automobile parts and vehicles and establish a new trade finance scheme. They have commenced efforts to record trade documents on the blockchain using SBI XDC's technology and to conduct factoring during the shipping period of export goods.

1. Background and Purpose

As global trade transactions continue to expand, efforts to streamline trade procedures by digitizing complex and time-consuming processes are being considered in various countries. In Japan, legislation related to the digitization of trade documents is scheduled to be submitted by the 2025 fiscal year. Additionally, regarding exports of used automobiles from Japan to other countries, as demand continues to grow, measures to address funding needs for maintaining competitiveness and securing a competitive edge have become urgent.

In this environment, SBI XDC and SST aim to expand the use cases of blockchain technology in actual trade transactions by collaborating to address challenges such as the lack of transparency in trade documentation and the difficulty of automating transactions through smart contracts. automation of transactions through smart contracts, and other features of blockchain technology to build trade finance schemes such as transaction recording and factoring. By collaborating, the two companies aim to expand the use cases for blockchain in actual trade transactions and contribute to further market expansion by promoting an increase in transaction volume through business efficiency and working capital efficiency on the supply side in response to the growing demand for used automobile parts and used automobiles.

2. Overview of this initiative

Currently, SST is working to streamline and improve the efficiency of trade information exchanges between sellers and buyers based on paper documents. We will record this trade information on the XDC Network blockchain. Additionally, to flexibly address the funding needs of Japanese exporters, SBI XDC will structure and implement accounts receivable factoring for SST, with the shipping period of export goods as the loan period.

Specifically, SBI XDC will record the export transaction information for used automobile parts containers shipped from Japan to the United Arab Emirates on the XDC Network blockchain, and implement factoring with a period set from loading in Japan to unloading in the United Arab Emirates. Note that the collection of accounts receivable will be handled by SST.

＜Scheme Overview＞  

<Image of export container: SST Akiruno Parts Yard>

3. Future Developments

Going forward, we will begin developing a user interface that will enable SST to enter transaction information and view transaction details related to export transactions between Japan and the United Arab Emirates, which are regularly conducted on SST, into the XDC Network blockchain.

Additionally, we will continue to implement factoring from SBI XDC and aim to establish a factoring scheme that benefits both SBI XDC and SST. We will also strive to implement a trade finance scheme utilizing smart contracts and automate the process from implementation to debt collection.

■Comment from SBI XDC Representative Director Tomohiko Kondo

In general trade transactions, the long lead times associated with transportation and the complex transaction flows pose significant challenges for both exporters and importers in terms of funding needs and administrative burdens. SST handles export transactions to the UAE, where SBI XDC's investors have a presence, and the collaboration with this company, which faces challenges in administrative procedures including accounts receivable management, is an excellent model case for the trade finance efficiency that SBI XDC aims to achieve.

Going forward, we hope this collaboration will serve as the first step toward advancing initiatives centered around the XDC Network, including the digitization of documents, payments, and the automation of trade receivable collection, involving stakeholders such as shipping companies and importers.

■Comment from Takuma Shoda, Representative Director of SST

The number of exports using our marine containers has been increasing year by year, mainly for corporate customers in the Middle East and South America. This year, we opened a branch in the United Arab Emirates and are also engaged in yard sales, which has led to the management of trade receivables becoming increasingly complex. We have determined that a partnership with SBI XDC, which has a base in the UAE, is the best option from a hardware perspective.

Through this collaboration with SBI XDC, we aim to optimize trade operations and cash flow management to further increase the number of orders.

■About SBI XDC Network APAC

SBI XDC Network is a joint venture between SBI Holdings, Inc. (Headquarters: Minato-ku, Tokyo; Representative Director and President: Yoshitaka Kitao) and TradeFinex Tech. (Headquarters: Dubai, United Arab Emirates; Co-Founders: Atul Khekade and Ritesh Kakkad), which operates the XDC Network. The XDC Network is a Layer 1 public blockchain designed to enhance the efficiency of trade finance, specifically tailored for use between businesses.

To expand the innovative solutions offered by the XDC Network across the APAC region, the company is providing trade finance solutions, expanding partnerships with subnet companies, and supporting cryptocurrency exchanges that wish to handle XDC.

https://www.SBI XDC.network/　

■About SS Trading Co., Ltd.

SS Trading is a joint venture between the SBI Group and the SOMPO Group.

The company focuses on used vehicles generated within and outside the group, conducting collection, dismantling, and resource recycling at its own facilities. Additionally, it exports and sells used vehicle parts and used vehicles to emerging regions worldwide.