Trade Finance and Blockchain: how smart contracts can improve operations in the world of Trade Finance.

Abstract

The blockchain is an innovative technology that is attracting a lot of attention but its characteristics and possible uses are not yet clear.

The thesis, analyzing the peculiarities of the blockchain, will try to provide possible solutions to improve and automate processes in the economic and financial sectors through the use of smart contracts. The applications of the technology within the Private Equity sector will be initially hypothesized first, in particular in the due diligence and acquisition. The use of technology in the banking sector will also be evaluated, specifically in anti-money laundering and customer identification procedures.

An initial examination of the innovative aspect linked to blockchain technology will allow us to understand its functioning and potential. A list of the types of structure will then help to identify the applications of each in the various private and public economic sectors.

In the second chapter, smart contracts will be defined, analyzing both their positive and critical aspects. The regulatory aspect that defines the nature of smart contracts in the Italian and European legislative system will be illustrated. A detailed analysis will demonstrate the flaws in the regulatory system concerning these "smart contracts". Having clarified the regulatory limits and the difficulties in applying smart contracts, a possible use within the acquisition process in Private Equity will be illustrated. Through the explanation of the acquisition process, the use of smart contracts will be hypothesized to speed up and automate some steps. A second hypothesis of use in the financial field will conclude the analysis undertaken in this chapter. The goal of this application is to improve and implement the analysis and information collection processes for the completion of anti-money laundering controls.

In the third chapter, the new methods of crownfounding and token acquisition will be the main protagonists; which will be carefully examined together with their reference ecosystems. Considerable space will be reserved for the sustainability and scalability of technology, highlighting the possible impacts, positive and negative, on the corporate environment and the territory that hosts them.

Finally, the paper concludes by demonstrating that the inclusion of the blockchain ecosystem through the use of smart contracts can lead to substantial innovation in the financial sector by radically changing the process of managing and using information.