Marco Polo Trade Finance Network Goes Bankrupt Highlighting the Struggles of Blockchain-Based Trade Finance

02/25/2023 22:36 • Tech Trends • 98 views

It is reported that the holding company of Marco Polo Trade Finance Network (formerly TradeIX) entered bankruptcy in Ireland. The blockchain network has more than 30 bank members, such as Commerzbank, Bank of New York Mellon and SMBC. Its supporters include ING Ventures and BNP Paribas. Recently, a potential $12 million deal with Bank of America failed, and the company failed to find a substitute investor. The company’s liabilities exceed its assets by 2.5 million euros (2.6 million dollars). The total debt is 5.2 million euros (5.5 million dollars), of which the tax bureau owes 2.6 million euros (2.7 million dollars). The latest account submitted is the account for 2021, showing a loss of nearly US $29 million and a cumulative loss of US $85 million. The largest external shareholder is Kistefos, followed by Japan’s SBI, ING, SMBC and BNP Paribas.

Marco Polo, the blockchain trade financing network, has gone bankrupt

Analysis based on this information:

Marco Polo Trade Finance Network, formerly known as TradeIX, is one of the leading blockchain-based trade finance networks in the world, with more than 30 bank members and supporters like ING Ventures and BNP Paribas. However, the holding company of Marco Polo has recently entered bankruptcy proceedings in Ireland due to the failure of a potential $12 million deal with Bank of America and the inability to find a substitute investor.

The bankruptcy reveals the challenges that blockchain-based trade finance still faces. Despite the potential benefits of blockchain technology in streamlining the trade finance process by increasing transparency and reducing costs, the adoption of this technology has been slow due to its complexity and the uncertainty around its legal and regulatory framework.

Moreover, the bankruptcy of Marco Polo highlights the need for better risk management and financial sustainability in blockchain-based trade finance. As the network relies on its member banks to provide liquidity, a failure to attract enough participants could leave the whole network vulnerable to collapse.

According to the latest financial report, the company’s liabilities exceed its assets by 2.5 million euros, and its total debt is 5.2 million euros, with the tax bureau owing 2.6 million euros. The company’s losses in 2021 alone are nearly US $29 million, with a cumulative loss of US $85 million.

Additionally, the bankruptcy of Marco Polo could also have implications for the wider blockchain industry. As one of the leading companies in this field, its failure could discourage potential investors and slow down the development of other blockchain-based trade finance networks.

In conclusion, the bankruptcy of Marco Polo Trade Finance Network highlights the challenges and risks that blockchain-based trade finance still faces. While the potential benefits of the technology are significant, the legal and regulatory issues, complexity, and the need for better risk management and financial sustainability must be addressed before broader adoption can occur.

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