Trade Finance Future-state benefits Establish payment terms Deliver goods Settle on terms Order goods Initiate Verified Verified Product Receive Provide invoice 2 shipment goods goods shipped goods 6 Importer Exporter Exporter Inspection Customs Freight Customs Importer Import bank Smart Smart company Country A 4 Country B Smart contract contract contract 7 Initiate 5 payment Financial 3 8 1 agreement + + + Shipment Letter of Shipment Smart Payment Import bank Export bank initiated credit received contract complete Export bank Future-state benefits 1 Real-time review: financial 3 Disintermediation: banks facilitating trade finance through DLT do not 7 Automated settlement and documents linked and require a trusted intermediary to assume risk, eliminating the need for reduced transaction fees: accessible through DLT are correspondent banks contract terms executed via reviewed and approved in real 4 Reduced counterparty risk: bills of lading are tracked through DLT, smart contract eliminate the time, reducing the time it takes eliminating the potential for double spending need for correspondent banks to initiate shipment 5 Decentralized contract execution: as contract terms are met, status is and additional transaction fees 2 Transparent factoring: invoices updated on DLT in real time, reducing the time and headcount 8 Regulatory transparency: accessed on DLT provide a real- required to monitor the delivery of goods regulators are provided with a time and transparent view into 6 Proof of ownership: the title available within DLT provides real-time view of essential subsequent short-term transparency into the location and ownership of the goods documents to assist in financing enforcement and AML activities WORLD ECONOMIC FORUM | 2016 80