In a joint venture with the United Arab Emirates’ TradeFinex, SBI Holdings is establishing a cryptocurrency operation in Japan aiming to foster the adoption of its enterprise blockchain platform. However, delving into TradeFinex and SBI unsettles the question of whether blockchain technology, in this context, is a tool for greater financial transparency or a vehicle for circumventing traditional regulatory oversight.
TradeFinex operates a decentralized platform on the XDC Network, enabling finance originators to interface with a spectrum of banks and financial institutions. The primary focus of TradeFinex lies in proffering blockchain-based trade finance products that span services like invoicing, supply chain finance, and more. It is already linked with multiple established entities such as the International Trade and Forfaiting Association, Enigio, and Validus, to name a few.
On the other hand, the underpinning XDC Network is a variation of Ethereum, leveraging a delegated proof-of-stake mechanism to achieve rapid transactions and low fees. It employs its native XDC token for broad uses inclusive of settlement costs, DApp payments, and more. However, on the flip side, the question arises whether utilising a propriety token could provoke doubts regarding financial transparency. Ensuring that the value of trade transactions accurately corresponds to the ever-fluctuating token value becomes a game of catch-up.
The news concerning the joint venture comes on the heels of Japan’s government expressing intentions to permit startups to raise funds via cryptocurrency tokens as opposed to traditional stock listings. Moreover, the country’s Financial Services Agency revealed its plans to revise the tax code relating to cryptocurrencies in 2023, aiming for a more proactive role in crypto regulation.
Ultimately, the engagement between TradeFinex and SBI betokens the growing interest and investment pouring into blockchain technology. Such indicators suggest that the blockchain’s time as a disruptive force in the inception of new digital financial products may be upon us. While potential promises transparency, speed, and affordability, one cannot discard the regulatory ambiguities that lie ahead owing to the accelerating evolution of blockchain technologies. The tussle between innovation and regulation will be an unfolding saga in the upcoming years.
Source: Cointelegraph
