IDEAS home Printed from https://ideas.repec.org/a/gam/jfinte/v2y2023i1p12-204d1099014.html

Conditional Token: A New Model to Supply Chain Finance by Using Smart Contract in Public Blockchain

Author

Listed:
  • Che-Pin Chen

    (Department of Risk Management and Insurance, National Cheng Chi University, Taipei 116011, Taiwan)

  • Kai-Wen Huang

    (Department of Management Information Systems, National Cheng Chi University, Taipei 116011, Taiwan)

  • Yung-Chi Kuo

    (Department of Management Information Systems, National Cheng Chi University, Taipei 116011, Taiwan)

Abstract

This paper defines Conditional Token (CT) as the token with specific conditions and proposes the use functions for its operations in smart contract so that it can be deployed at the public blockchain. If CTs were exchanged to/equivalent to fiat currency once then all conditions are realized, that is, the required performances and obligations/rights are agreed upon. In use, the obligation-type CT can be used as a divisible mortgage or be used as a representation of accounts receivable, accounts payable and vouchers as it is used in accounting. While the rights-type CT can be used as divisible fixed-income bonds or as an investment vehicle. Integrate both types of CTs with a matching methodology can thus be used in any kind of peer-to-peer (P2P) system of the decentralized finance, such as crowdfunding and P2P lending. This paper thus applying this new model to solve the complex issues of supply chain finance. For feasibility, this study concludes CT is the “Verdinglichung Obligatorischer Rechte”, and CTs are better than the current corporate loans in terms of cost and benefits. In addition, it is capable of transferring risk to other investors. In terms of implementation, this paper proposes a system framework and has completed a proof of concept of the system.

Suggested Citation

  • Che-Pin Chen & Kai-Wen Huang & Yung-Chi Kuo, 2023. "Conditional Token: A New Model to Supply Chain Finance by Using Smart Contract in Public Blockchain," FinTech, MDPI, vol. 2(1), pages 1-35, March.
    • Handle: RePEc:gam:jfinte:v:2:y:2023:i:1:p:12-204:d:1099014
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2674-1032/2/1/12/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2674-1032/2/1/12/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hana Trollman & Guillermo Garcia-Garcia & Sandeep Jagtap & Frank Trollman, 2022. "Blockchain for Ecologically Embedded Coffee Supply Chains," Logistics, MDPI, vol. 6(3), pages 1-17, June.
    2. Treiblmaier, Horst, 2021. "The token economy as a key driver for tourism: Entering the next phase of blockchain research," Annals of Tourism Research, Elsevier, vol. 91(C).
    3. Bikramaditya Ghosh & Dimitrios Paparas, 2023. "Is There Any Pattern Regarding the Vulnerability of Smart Contracts in the Food Supply Chain to a Stressed Event? A Quantile Connectedness Investigation," JRFM, MDPI, vol. 16(2), pages 1-12, January.
    4. Jiri Chod & Nikolaos Trichakis & Gerry Tsoukalas & Henry Aspegren & Mark Weber, 2020. "On the Financing Benefits of Supply Chain Transparency and Blockchain Adoption," Management Science, INFORMS, vol. 66(10), pages 4378-4396, October.
    5. Aichih (Jasmine) Chang & Nesreen El-Rayes & Jim Shi, 2022. "Blockchain Technology for Supply Chain Management: A Comprehensive Review," FinTech, MDPI, vol. 1(2), pages 1-15, June.
    6. Ye Guo & Chen Liang, 2016. "Blockchain application and outlook in the banking industry," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-12, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Igor Kabashkin & Vladimir Perekrestov & Maksim Pivovar, 2025. "Token-Based Digital Currency Model for Aviation Technical Support as a Service Platforms," Mathematics, MDPI, vol. 13(8), pages 1-35, April.
    2. Vasiliki Basdekidou & Harry Papapanagos, 2025. "SEP and Blockchain Adoption in Western Balkans and EU: The Mediating Role of ESG Activities and DEI Initiatives," FinTech, MDPI, vol. 4(3), pages 1-48, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lingling Xu & Tingting Tian, 2024. "Blockchain-enabled enterprise bleaching green regulation banking evolution game analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(11), pages 27457-27483, November.
    2. Rico-Peña, Juan Jesús & Arguedas-Sanz, Raquel & López-Martin, Carmen, 2023. "Models used to characterise blockchain features. A systematic literature review and bibliometric analysis," Technovation, Elsevier, vol. 123(C).
    3. Gao, Guang-Xin & Bi, Jian-Wu, 2024. "Online travel agency or blockchain-based platform?," Annals of Tourism Research, Elsevier, vol. 109(C).
    4. Patel, Ritesh & Migliavacca, Milena & Oriani, Marco E., 2022. "Blockchain in banking and finance: A bibliometric review," Research in International Business and Finance, Elsevier, vol. 62(C).
    5. Zhang, Xuefeng & Li, Zhe & Li, Guo, 2023. "Impacts of blockchain-based digital transition on cold supply chains with a third-party logistics service provider," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    6. Woon Leong Lin & Ying Yang & Nelvin XeChung Leow & Wai Mun Lim & Pek Chuen Khee & Nick Yip, 2025. "Trends in the dynamic evolution of blockchain and circular economy: A literature review and bibliometric analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 34(1), pages 1062-1084, January.
    7. Li, Yuze & Jiang, Shangrong & Shi, Jianming & Wei, Yunjie, 2021. "Pricing strategies for blockchain payment service under customer heterogeneity," International Journal of Production Economics, Elsevier, vol. 242(C).
    8. Wankmüller, Christian & Pulsfort, Johannes & Kunovjanek, Maximilian & Polt, Romana & Craß, Stefan & Reiner, Gerald, 2023. "Blockchain-based tokenization and its impact on plastic bottle supply chains," International Journal of Production Economics, Elsevier, vol. 257(C).
    9. Li, Yue & Jiao, Bing & Li, Lin & Zhao, Ruiqing, 2024. "Does bank-tax-interaction benefit small and medium manufacturer? An intertemporal signaling game," International Journal of Production Economics, Elsevier, vol. 271(C).
    10. Zhu Yongjie, 2023. "Enterprise life cycle, financial technology and digital transformation of banks—Evidence from China," Australian Economic Papers, Wiley Blackwell, vol. 62(3), pages 486-500, September.
    11. Ilya Ivaninskiy & Irina Ivashkovskaya & Joseph A. McCahery, 2023. "Does digitalization mitigate or intensify the principal-agent conflict in a firm?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(3), pages 695-725, September.
    12. Li, Zhaochen & Xu, Zimu, 2025. "Digital technology and innovation:The impact of blockchain application on enterprise innovation," Technovation, Elsevier, vol. 139(C).
    13. Qing, Lingli & Shen, Pin & Nam, Eun-Young & Ma, Xiang, 2025. "Does supply chain digitalization improve corporate energy performance? A quasi-natural experiment from Chinese supply chain innovation and application pilot policy," Energy Economics, Elsevier, vol. 147(C).
    14. Yan Liu & Qiuju He, 2024. "Digital transformation, external financing, and enterprise resource allocation efficiency," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(4), pages 2321-2335, June.
    15. Christopher S. Tang, 2022. "Innovative Technology and Operations for Alleviating Poverty through Women's Economic Empowerment," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 32-45, January.
    16. Niu, Baozhuang & Mu, Zihao & Cao, Bin & Gao, Jie, 2021. "Should multinational firms implement blockchain to provide quality verification?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    17. Mark A. Chen & Shuting Sophia Hu & Joanna Wang & Qinxi Wu, 2023. "Can Blockchain Technology Help Overcome Contractual Incompleteness? Evidence from State Laws," Management Science, INFORMS, vol. 69(11), pages 6540-6567, November.
    18. Manahov, Viktor & Li, Mingnan, 2024. "Stablecoins: New perspectives for travel and tourism," Annals of Tourism Research, Elsevier, vol. 107(C).
    19. Andoni, Merlinda & Robu, Valentin & Flynn, David & Abram, Simone & Geach, Dale & Jenkins, David & McCallum, Peter & Peacock, Andrew, 2019. "Blockchain technology in the energy sector: A systematic review of challenges and opportunities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 100(C), pages 143-174.
    20. Changping Zhao & Juanjuan Sun & Yu Gong & Zhi Li & Peter Zhou, 2022. "Research on the Blue Carbon Trading Market System under Blockchain Technology," Energies, MDPI, vol. 15(9), pages 1-17, April.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jfinte:v:2:y:2023:i:1:p:12-204:d:1099014. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager The email address of this maintainer does not seem to be valid anymore. Please ask MDPI Indexing Manager to update the entry or send us the correct address (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.