Blockchain, Enterprise Digitalization, and Supply Chain Finance Innovation

Abstract

Digital supply chain finance is an innovative product created through the integration of the blockchain technology and traditional supply chain finance. This paper constructs the theoretical framework of mortgage financing from banks by enterprises in the supply chain network, and systematically analyzes the economic rationale governing the digital supply chain finance, along with its pros and cons compared with traditional supply chain finance. The findings show, when there are enough enterprises on the supply chain and sufficient qualified information about these enterprises, the consensus mechanism of the supply chain can reveal close-to-truth enterprise information and prevent information manipulation, malicious fraud, and other moral hazards so that banks can provide accessible and affordable financing services for enterprises on the chain with risks effectively controlled. Otherwise, if there are not enough enterprises on the chain and the credibility of their information cannot be guaranteed, banks will prefer traditional offline methods such as due diligence for risk control. This paper theoretically reveals that, along with the broad application of the blockchain technology in the supply chain and the resulting digitalization of enterprises, digital supply chain finance based on blockchain technology will become a more efficient and inclusive means of financial support.

Key words： blockchain, supply chain finance, moral hazard, fintech