VeChain and Mastercard are among the heavy hitters backing the new APAC Provenance Council, which has already secured millions in funding for supply chain tracking and financing pilots throughout the Asia Pacific region.
The consortium will provide comprehensive solutions for authenticating and tracking food, wine and produce using blockchain, with a particular focus on the $76 billion of exports from Australia to China.
Payments will be courtesy of Mastercard outside of China, and Alipay Australia for goods headed to China. Products can be tracked using VeChain as the public blockchain or Mastercard Provenance as the permissioned ledger.
Supply chain tracking was a key use case identified in the Australian Government’s recent National Blockchain Roadmap and Australia's share in the value of exports to China reached a record 38% in 2019 — more than any other country.
Faster payments at various stages
With the economic lockdown badly affecting company cash flows, a unique selling point will be to enable "milestone" payments to various parties as shipments move along the supply chain.
For example 30% can be automatically paid when the blockchain records a shipment clearing customs in Australia, another 30% when it hits customs in China and the remainder on delivery. Instant payments can be made using credit to a digital wallet, rather than waiting for accounts to settle a month later.
David Inderias, the co-founder and CEO of Fresh Supply Co. — a core vendor behind the Provenance Council — said Mastercard and Alipay enabled the consortium to offer instant payments.
"[We offer] the ability to finance and facilitate payments instantly," he said. "We can get our clients paid faster, so that means paying by credit. Typically terms of trade is receipt plus 30 days, so it's exciting to a lot of our clients who can get paid instantly."
"So what we're saying is we're taking B2B, extremely large invoices and fronting them short term credit for 30 days. So you can hold on to your cash so you have more working capital.
If I'm a purchaser like Alibaba, I don't have to use real money, I can use credit, so long as I settle in 30 days. And the benefit of that is the producer gets paid quickly."
CEO of VeChain Sunny Lu said this new ecosystem would be enormously beneficial. "The implementation of blockchain technology certainly contributes to buffering the immediate economic impacts of the pandemic for enterprises, and will help improve productivity by unleashing more resources and growth opportunities," he said.
Apart from blockchain and finance companies, the consortium also includes food industry bodies, standards agencies, packaging and labelling service providers.
Blockchain verified "paddock to plate"
The core commercial vendors behind the Provenance Council are all Australian: supply chain integrations and middleware company Fresh Supply Co., CSIRO-backed digital fingerprinting company Laava and provenance authentication outfit Source Certain International.
Inderias said FSC already offers blockchain-verified trade financing of $80,000 a week for a major Australian dairy exporter and is in the process of integrating one of the country's largest seafood exporters which accounts for hundreds of millions of exports annually.
The CEO of Blockchain Australia, Nicholas Giurietto, voiced his support for the council, stating:
“The National Blockchain Roadmap identified agricultural supply chains as a key area where blockchain and adjacent technologies can transform our national capability. The formation of the APAC Provenance Council is a great step forward that will allow us to move forward with projects that will enhance the transparency, efficiency and management of agricultural and other supply chains.”
This article has been updated to clarify that Alipay is participating as a payment service provider.