Tokoin recently participated in a meetup organized by XSQ, on 27th June 2019, at Beach Road, Shaw Tower (behind Suntech City). XSQ specializes in building hardware and infrastructure for blockchain development and operates its own data centers in Singapore. MakerDAO and ShuttleOne were the other participants in the event. The theme for the meetup was “Decentralized Finance: Its Impact & YOU”. The event was aimed at educating the audience about what Decentralized Finance means, and how it will impact our lives and MSME (Micro, Small & Medium Enterprises) sector in the near future.
The FinTech (or Financial Technology) industry has seen unprecedented growth over the last few years. According to the latest report by Ernst & Young, global FinTech adoption has grown from 16% in 2015 to 64% in 2019. The advancement of blockchain technology has provided further impetus to this growth, and created the Decentralized Finance ecosystem. In the meetup, we informed the audience about big a role blockchain technology is going to play in the economy of the South Asian nations in the coming years. We also explained to them about the importance of MSMEs in the GDP of the ASEAN countries, the challenges faced by them, and how we at Tokoin are trying to help the MSME sector.
Most of the MSMEs are based in the rural sector, and they often lack proper documentation and credit history. This makes it extremely difficult for these MSMEs to secure loans from banks. Moreover, as their order volumes are low, their average production and transportation cost also increases. The net effect is that MSMEs are unable to scale up their operations, and they languish when it comes to open market competition.
Tokoin is using blockchain technology to build a secure platform on which reputation and credit scores for the MSMEs can be established. MSMEs would be able to upload identity information and transaction data on our platform and increase their reputation. Other parties (such as warehouses, material suppliers, or logistics providers) would be able to access this data by paying a fee to the MSME. In the absence of credit history, this reputation score will help banks in evaluating the risk associated with lending money to a particular MSME.
About the other participants:
MakerDAO is a decentralized lending platform that allows users to borrow its USD-pegged stable coin (called Dai) against their token assets. Their open platform ensures lower interest rates (compared to banks), better global liquidity, and equal credit opportunity for everyone.
ShuttleOne is developing a FinTech blockchain platform to provide convenient and cost-efficient transactions on the blockchain for users and networks alike. Their vision is to create a decentralized finance network that will have enough computational power to compete with the current centralized financial networks.
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