A Delaware firm taps blockchain to breathe life into Asia's open commerce push
A Delaware company's plotting to use blockchain to blow the lid off of supply chain inefficiencies and be the main catalyst behind Asia's burgeoning open markets and electronic payments initiative.
OptDyn is in the design phase of a project, with a bank it would not identify, to combine an international process management system that bypasses the traditional payment gateways by using the blockchain to direct connect all members of a corporate network that operate on the digital silk road.
A play on the ancient trading route from Asia to Europe, the digital silk road is a China-supported international digital commerce system that aims to use simplified payments processing to enable international shipping and supply chains for Asia, Europe, North America and other regions. The trading initiative is not connected to an underground bitcoin-related theft ring, which also carried the "silk road" name.
"We want to act as a catalyzer to speed transactions, and avoid paper processes. It's a challenge and there is still work to be done," said Alex Karasulu, CTO and founder of the Wilmington, Del.-based OptDyn, which hopes to apply blockchain to a number of use cases to power international supply chains with a very low-touch payments workflow.
The drags on a fully digital international supply chain are bottlenecks where the path between a manufacturer and a payment gateway retains some paper-based processes, or requires a third party to handle part of the task.
OptDyn has built the Subutai Blockchain Router, and a few weeks ago finished work on what it calls a "blockchain in a box," or a way to create a self-contained cloud development environment. This environment powers the smart contracts that trigger transactions automatically when certain conditions are met. The blockchain in a box is designed to simplify the configuration of a blockchain network.
Subutai automates clearing and settlement by bridging between bank accounts in the supply chain, circumventing third parties such as correspondent banks in a manner similar to Ripple's work with international P2P transfers for e-commerce. "If all parties in the supply network have bank accounts, there's no 'international problem,' " Karasulu said.
Subutai's existing blockchain router connects bar code scanners, shipping information and billing systems. This supports near-real-time payments as packages arrive, as part of the "One Belt, One Road" digital trade program that's tied to the digital silk road initiative.
Subutai is designed to tie together physical devices and the applications that manage the devices to enable blockchain-based payment systems. OptDyn also uses Subutai to support ATM networks, powering the kiosks to facilitating transactions and foreign exchange kiosks in airports. It's also working with the technology company Odoo, a manufacturer of ERP and CRM systems for digital point of sale systems, to enable displays, payments, sales and inventory management.
The use of blockchain to support international payments has been gaining steam over the past few years, as distributed ledger providers such as Ripple apply the blockchain to remove parties such as correspondent banks from cross-border payments.
Ripple is considered the start of a wave of such initiatives, and other companies have joined the market. One of the most recognized to address supply chains is an IBM-implemented blockchain that includes IBM, Walmart, Dole, Driscoll's, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestle, Tyson Foods and Unilever, according to Tim Sloane, vice president of payments innovation and the director of the Emerging Technology Advisory Service at Mercator.
The development partners are IBM, Walmart, JD.com and Tsinghua University's National Engineering Laboratory for E-Commerce Technologies. "There are others and a few attempt to integrate payments into the solution, but none come close to having the participation of the above," Sloane said.