Trade Finance on XDC Network

XDC Network is specifically designed to revolutionize the $17 trillion global trade finance industry by enabling the digitization and tokenization of trade finance instruments.

The Trade Finance Challenge

Traditional trade finance suffers from:

• Slow Settlement: 5-10 days for cross-border transactions
• High Costs: Multiple intermediaries increase fees
• Paper-Based: Manual document handling creates inefficiencies
• Limited Access: SMEs struggle to access trade finance
• Lack of Transparency: Limited visibility across the supply chain

XDC Network Solution

Instant Settlement

sequenceDiagram
    participant Exporter
    participant XDC Network
    participant Importer
    participant Bank

    Exporter->>XDC Network: Submit LC Request
    XDC Network->>Bank: Verify & Approve
    Bank->>XDC Network: Issue Digital LC
    XDC Network->>Importer: Notify LC Issued
    Exporter->>XDC Network: Ship & Submit Docs
    XDC Network->>Bank: Verify Documents
    Bank->>XDC Network: Release Payment
    XDC Network->>Exporter: Receive Payment (2s)

Supported Instruments

Instrument	Traditional Time	XDC Time	Cost Reduction
Letter of Credit	5-10 days	< 1 hour	60-80%
Invoice Financing	30-90 days	< 24 hours	50-70%
Bill of Lading	5-7 days	Instant	70-90%
Bank Guarantee	3-5 days	< 1 hour	60-80%

Technical Implementation

Smart Contract Example

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.19;

contract LetterOfCredit {
    enum LCStatus { Draft, Issued, Amended, Utilized, Expired, Cancelled }

    struct LC {
        address issuer;
        address beneficiary;
        address applicant;
        uint256 amount;
        uint256 expiryDate;
        LCStatus status;
        bytes32 documentHash;
    }

    mapping(bytes32 => LC) public letterOfCredits;

    event LCIssued(bytes32 indexed lcId, address issuer, address beneficiary, uint256 amount);
    event LCUtilized(bytes32 indexed lcId, uint256 amount);

    function issueLC(
        bytes32 _lcId,
        address _beneficiary,
        address _applicant,
        uint256 _amount,
        uint256 _expiryDate
    ) external {
        letterOfCredits[_lcId] = LC({
            issuer: msg.sender,
            beneficiary: _beneficiary,
            applicant: _applicant,
            amount: _amount,
            expiryDate: _expiryDate,
            status: LCStatus.Issued,
            documentHash: bytes32(0)
        });

        emit LCIssued(_lcId, msg.sender, _beneficiary, _amount);
    }

    function submitDocuments(bytes32 _lcId, bytes32 _documentHash) external {
        LC storage lc = letterOfCredits[_lcId];
        require(msg.sender == lc.beneficiary, "Only beneficiary");
        require(lc.status == LCStatus.Issued, "LC not active");

        lc.documentHash = _documentHash;
    }

    function releasePayment(bytes32 _lcId) external {
        LC storage lc = letterOfCredits[_lcId];
        require(msg.sender == lc.issuer, "Only issuer");
        require(lc.documentHash != bytes32(0), "Documents not submitted");

        lc.status = LCStatus.Utilized;
        emit LCUtilized(_lcId, lc.amount);

        // Transfer payment logic here
    }
}

Integration with xdc3.js

const Xdc3 = require('xdc3');
const xdc3 = new Xdc3('https://rpc.xinfin.network');

// Connect to LC contract
const lcContract = new xdc3.eth.Contract(LC_ABI, LC_CONTRACT_ADDRESS);

// Issue a Letter of Credit
async function issueLC(lcId, beneficiary, applicant, amount, expiryDate) {
    const tx = await lcContract.methods.issueLC(
        lcId,
        beneficiary,
        applicant,
        xdc3.utils.toWei(amount.toString(), 'ether'),
        expiryDate
    ).send({ from: issuerAddress });

    console.log('LC Issued:', tx.transactionHash);
    return tx;
}

// Submit documents
async function submitDocuments(lcId, documentHash) {
    const tx = await lcContract.methods.submitDocuments(
        lcId,
        documentHash
    ).send({ from: beneficiaryAddress });

    return tx;
}

TradeFinex Platform

TradeFinex is the flagship trade finance platform built on XDC Network, offering:

• Peer-to-Peer Trade Finance: Direct connection between suppliers and funders
• Digital LC Issuance: Fully digitized letter of credit workflow
• Invoice Discounting: Quick access to working capital
• Supply Chain Finance: End-to-end supply chain visibility

Benefits for Stakeholders

For Banks

• Reduced operational costs
• Faster transaction processing
• Enhanced compliance and auditability
• New revenue opportunities

For Corporates

• Improved working capital
• Faster payment cycles
• Reduced documentation burden
• Greater transparency

For SMEs

• Access to trade finance
• Lower costs
• Faster funding
• Simplified processes

Case Studies

Global Commodity Trading

A leading commodity trader reduced settlement time from 7 days to 2 hours using XDC-based digital LCs, saving over $2M annually in operational costs.

Cross-Border Invoice Financing

An SME exporter accessed invoice financing within 24 hours instead of the typical 60-day wait, improving cash flow by 40%.

Getting Started

1. Review Documentation: Understand the technical requirements
2. Contact TradeFinex: tradefinex.org
3. API Integration: Use our APIs to integrate with existing systems
4. Pilot Program: Start with a pilot implementation

Resources

• TradeFinex Platform
• XDC Trade Finance