International trade exposes sellers and buyers to high levels of counterparty risk, where sellers may fail to deliver goods and/or buyers may fail to pay for delivery. Banks therefore invented letters of credit (LoC) to reduce risk, but at the same time created new problems. For instance, malicious actors can commit fraud by producing fraudulent LoC, commodity inspection certificates, import/export declarations, commercial invoices, and freight documents, or even by manufacturing letters of credit from an insolvent bank. LoC weaknesses arise from the strict compliance standards that govern letter design. Banks often decline payment to exporters if the presented documents contain any discrepancies, even if they are trivial. Also, there are cases where an exporter sent inferior or... counterfeit goods, but because the exporter’s documentation could still show proof of delivery, the bank still sent payment. Strict compliance fails because it focuses only on the documentation and the terms of the LoC, rather than the quality of the goods and the spirit of the agreement. Furthermore, since LoC often exist only in paper form, there are attendant inefficiencies in production and verification, and chances of human error or that the LoC may be lost. This research therefore explores the feasibility of a third- party payment platform for trade finance, where exporters and importers could utilize “platform contracts” to facilitate settlement. Though third-party payment systems already exist for e-commerce, trade finance usually involves significantly larger dollar amounts and longer delivery dates, so the design has to be more secure and tightly controlled. In particular, this research examines smart contract platforms and back-end systems based on blockchain technology. Block creation could codify agreement terms and conditions, and individual blocks may be identified by unique hashes (check codes for verifications). Blocks connected together in a chain ensure the immutability of the stored data, and protect against tampering. However, this research maintains that decentralization, as in the Bitcoin blockchain protocol, is undesirable and introduces other problems. First, rewards accrue mainly to the miners, who confirm transactions and create blocks. Second, decentralization does not account for government policies, which in Taiwan are particularly strict. Third, decentralized networks present a direct threat to banks, who are therefore likely to oppose the system entirely, thus depriving all participants of new methods that improve their operations and lower costs and risks. The expected benefits of the “platform contract” solution are as follows. First, because importers would prepay to an escrow account, LoC would not need to be obtained. Bills of lading would become significantly simplified, since every point in the transaction would be recorded to the blockchain, making it more difficult for malicious actors to manufacture fraudulent documentation. “Platform contracts” would be paperless and automated as much as possible, thus reducing risk of loss and human error. Because all data would be stored in a public ledger, contract terms and process statuses could be audited at any time. Finally, digitization could better enable logistics operations powered by IoT, and thus enable the real-time tracking of goods.