A Blockchain Application Subcommittee initiated by the China Federation of Logistics and Purchasing (CFLP) was unveiled at the recent 2016 Fintech Global Summit in Shezhen last month.

Shenzhen Digital Singularity Ltd. is the only private company providing blockchain technology support in China. As an initiator of the organizing body, the company will lead by setting standards and rules for the industry.

The subcommittee was initiated by a blockchain startup, logistics companies, and financial institutions. It will be focusing on the promotion of blockchain technology in logistics by introducing blockchain technology and business training, research and development, standards of blockchain for logistics, blockchain-based company credit mechanisms, and upgrading of the logistics supply-chain industry.

Liu Yang, CEO of Shenzhen Digital Singulariy Ltd. Noted that blockchain by its nature enjoys high accountability, anti-counterfeiting capabilities, and immutability. The technology was used mainly for Bitcoin, but now the application of the technology is witnessing a trend the financial sector.

Liu Yang went on to say that problems like the loss or misdirection of cargo require powerful tracing capabilities. “Blockchain technology can perform well for logistics in that regard,” she said.

The China Federation of Logistics and Purchasing has seen the impact from its overseas counterparts. The association hopes that the introduction of blockchain technology can tackle existing problems in logistics in China as well as tapping into the financial sector.

Shenzhen Digital Singularity Ltd. Has been focusing on Bitcoin, and thus have developed R&D capabilities related to blockchain technology. For the subcommittee, Digital Singularity will be the only blockchain technology provider, responsible for the settinh of standards. Liu Yang expressed the wish to promote the standard-making in the industry as well as to provide comprehensive blockchain solutions that are capable of addressing real problems in cooperation with traditional logistics and procurement companies.

Blockchain technology can also be used to tag the credit rating of supply chain companies. The focus now is on traceability and efficiency. But blockchain technology can improve the access of smaller supply chain companies to credit by making the companies’ financials transparent, allowing banks to better understand their eligibility for loans.

From the value transfer of Bitcoin in its early days to the transfer of physical objects in the real world, blockchain is growing in its applications. Liu Yang believes that in the near future, the perfect combination of blockchain technology and the logistics industry will tackle the financial hindrances in logistics, and significantly improve its efficiency.