Russian retailer simplifies trade finance using Ethereum platform
The Ethereum-based trade finance platform Factorin has officially launched in Russia, with the country's fourth largest retailer as a major participant.
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According to a report by Coindesk, the Russian blockchain platform Factorin announced on 6/4 that its platform is officially running on Dixy's financial system after a 6-month trial period. Dixy, the fourth largest chain supermarket in Russia with nearly $5 billion in revenue in 2018, is involved in this initiative.
Following a successful pilot test, Dixy is now transitioning transactions between suppliers and factoring companies to Factorin, an open-source trade finance platform powered by Ethereum. This new system, developed on a private version of Ethereum, allows Dixy's suppliers to receive payments within one business day, a significant improvement from the previous two-week payment timeline. According to Factorin co-founder Andrei Maklin, the platform is integrated with multiple banks and factoring companies that facilitate settlements between retailers and suppliers through a single interface.
Factoring, also known as accounts receivable financing, refers to a process where a company sells its accounts receivable at a discount to a third party (a factoring institution) and receives the corresponding financing to facilitate quick cash turnover.
Initial participants include Russia's largest private bank Alfa Bank, Pervouralskbank, and factoring specialist GPB-Factoring. Dixy has become Factorin's first major client, and co-founder Maklin stated that the platform plans to scale up and cater to various types of businesses, adding:
The product has been in a trial phase since December last year, during which it underwent 12,000 transaction tests. Through testing, we found that the platform significantly reduces settlement times. Working with Dixy has become a model of innovation for large companies, and we have ambitious plans for the retail and other industries.
According to ACE reports, major retail giants are increasingly adopting blockchain technology this year, whether it's Carrefour's product traceability or Walmart's pharmaceutical supply chain tracking, demonstrating that blockchain is not just a trend but can effectively help companies reduce labor costs and associated risks.
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