CBDC Supplychain Finance ResearchUniversity of Surrey|Portdex|ESRC
Surrey has secured a grant under Portdex’s CBDC research and development initiative to study the impact of CBDCs on supply chain finance for SMEs. This research is crucial to understanding the potential benefits and risks of using CBDCs to improve the efficiency, transparency, and accessibility of financing for small and medium-sized enterprises (SMEs) involved in global supply chains.
- Enhanced Efficiency and Reduced Costs: CBDCs cross-border payments, reducing transaction times and costs associated with traditional payment methods like wire transfers and letters of credit.
- Improved Transparency and Traceability: Traceability & transparency in supply chains enable better tracking of goods, payments, and ownership.
- Increased Access to Finance for SMEs: Access to finance for SMEs, particularly those in the UK and emerging markets or facing challenges in obtaining traditional financing.
- Reduced Counterparty Risk: Mitigation of counterparty risk in supply chain transactions, reducing the risk of defaults or non-payments.
- Automation of Supply Chain Finance Processes: Automation of supply chain finance, reducing paperwork, streamlining processes, and improving overall efficiency.
- Regulatory Uncertainty and Compliance Burdens: The existing regulatory landscape & CBDCs for supply chain finance.
- Technological challenges include interoperability: Adoption of CBDCs may require SMEs to upgrade their technology infrastructure and adapt to new digital payment methods.
Regulatory Uncertainty and Compliance Burdens: The evolving regulatory landscape surrounding CBDCs could create uncertainty for businesses and increase compliance costs.
Technological Challenges: Adoption of CBDCs may require SMEs to upgrade their technology infrastructure and adapt to new digital payment methods.
Financial Exclusion: If access to CBDCs is not inclusive, it could exacerbate existing financial inequalities and hinder the participation of certain SMEs.
Potential for Disintermediation: CBDCs could disintermediate traditional financial institutions, potentially affecting their role in supply chain finance.
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