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Laxman Pai, Opalesque Asia: Blockchain might be able to dramatically boost trade finance across the world, generating a whopping one trillion US dollars in international trade finance.
A new joint research report by the World Economic Forum and the global management consultancy giant, Bain & Company said that with the rise of technologies, such as the internet of things (IoT), blockchain and artificial intelligence, the means to facilitate international trade are growing, too.
The report, 'Trade Tech - A New Age for Trade and Supply Chain Finance' forecasts distributed ledger technologies (DLT) will bring in new trade, helping close the current trade finance gap of $1.5 trillion.
According to the WEF report, an additional $1 trillion in financing will be added to global supply chains by 2028 as a direct result of increased DLT integration. This figure represents new capital that would have otherwise been missed out on had DLT never existed.
"[Approximately] 30% or $1.1 trillion of new trade volume will result due to DLT removing barriers," they say, adding that "[approximately] 40% or $0.9 trillion of traditional will move to DLT for better service levels and lower fees."
As part of the whitepaper, WEF argued that national and regional government have no better alternative than to adopt blockchain and set enabling policies to benefit from the technology. Implementing blockchain would lower the credit risk for financiers, reduce the necessary fees, and effe...................... To view our full article Click here
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