(Yicai) May 8 -- Shanghai has launched a blockchain-powered bulk commodity trading services platform, a major step in hastening the formation of digital trade infrastructure in the Yangtze River Delta region and providing support for further expanding regional trade.

The new platform, developed by the Digital Innovation Alliance for Shipping and Trade, connects several major industry data systems through a digital architecture, including those of China Materials Storage & Transportation Group, Shanghai International Port Group, the National Bulk Commodity Warehouse Receipt Registration Center, and the Shanghai Metals Market.

By linking these systems, it enables multi-dimensional cross-checking and authenticity verification of cargo status data, improving the trading system’s operational efficiency and transparency, the Digital Innovation Alliance for Shipping and Trade recently announced.

Shanghai-based DIAST is responsible for building a trusted, interconnected digital infrastructure for the shipping and trade sector, and its members include the National Blockchain Technology Innovation Center as well as several leading central and local state-owned enterprises.

Verifying the authenticity of underlying assets has always been the main challenge in bulk commodity trade financing, a bank-based supply chain finance professional in East China told Yicai. He said that a trusted data circulation system will strengthen lenders’ ability to verify cargo movement, storage status, and transaction backgrounds.

“If data on ownership, storage, and logistics can be verified in real time, banks will be able to improve both financing efficiency and risk control,” the person noted.

By using digital technologies such as blockchain, the new platform will remove data barriers between business segments and promote coordination across the entire value chain, a supply chain finance industry veteran told Yicai.

Blockchain technology moves commodity sector financing from being based on corporate credit to being based on asset credit, according to Zhao Xusheng, general manager of the supply chain finance department at China Zheshang Bank. It also opens up a CNY200 trillion (USD29.4 trillion) market for inventory-based collateral financing for financial institutions, enabling them to integrate more seamlessly into the bulk commodity services trading value chain, Zhao said.

Built on the underlying capabilities of the Shanghai Shipping and Trade Linked Blockchain Service Platform, also known as Shipping & Trade Blockchain, the new platform integrates multi-source data from shipping, trade, warehousing, taxation, and other areas. It is expected to drive the industry’s shift to integrated and coordinated operations from fragmented management.

Shipping & Trade Blockchain is Shanghai’s public blockchain infrastructure for shipping and trade, enabling trustable data sharing across the entire supply chain, including shipping, trading, warehousing, and taxation. It now encompasses more than 300,000 companies and has supported transactions in excess of CNY1 trillion (USD147 billion).

It is already used in a range of practical business processes, including warehouse receipt registration, trading, and financing in the bulk commodity sector, providing solid technical support for the industry’s digital operations.

Editors: Tang Shihua, Martin Kadiev