Two blockchain scenarios: Agriculture index insurance and supply chain finance

Lecture Series FS21, UZH Blockchain Center - Lecture Series

Speaker: Prof. Dr. Fangfang Tang (Peking University)

Abstract:

Case Study 1: Agriculture index insurance and Blockchain application

Chinese agriculture insurance market size has grown from RMB 3 billion to 45 billion during the decade of 2007-2017, about 15 times expansion. The potential of this market is still huge. However, there are a number of issues to be solved or improved, from the problem of few insurance policy products to the oversimplified and non-transparent way of government subsidies (over 25 billion in 2017 alone). Agriculture index insurance is an innovative way, linked to indices such as weather, price, and so on, including aquaculture and swine production, etc. Blockchain technology may be a good solution to improve the problems of information asymmetry and inefficiency of government subsidies. Some possibilities are discussed.

Case Study 2: Application of Blockchain technology in supply chain finance

The market size of supply chain finance in China (mainland) reached 14.42 trillion Yuan (RMB) in 2017, 16 trillion in 2018 and estimated to be 27 trillion in 2020. However, there have been some major problems in this market, for example, 1). The core enterprise cannot have complete information on the chain partners either upward or downward, thus the credibility of trust cannot be extended effectively and banks have difficulties to provide sufficient services for the relevant parties, especially for the SMEs that need financial services most urgently. 2) It lacks systematic risk assessment because of the information isolation issues in the supply chains. 3). It is difficult to control the risk of contract completion, especially when there are multi-layers of many suppliers with great uncertainty (such as misappropriation of funds, malicious default, and so on). This is a very good application scenario for Blockchain technology with discussions on some possibilities and real cases in China.