Blockchain Projected To Raise $1 Trillion In Trade
If rolled out SMEs are set to benefit greatly since credit sources will be wide open.
WEF Study Reveals Blockchain Potential In Trade
A new research has revealed that blockchain technology has great potential in trade finance. The study by the World Economic Forum and Bain & Company noted that blockchain has the potential of filling the $1.5 trillion distribution demand.
The study highlighted that blockchain can ease financing for SME in developing markets. The joint study revealed that with a clear rollout, the blockchain can generate an additional $1 trillion in trade.
Data from ADB notes that the world trading finance is currently experiencing a deficit of $1.5 trillion and has the potential of hitting $2.4 trillion within the next seven years. According to the joint research, the deficit is due to lack of credit avenues for SMEs that want to thrive.
The study concluded that $1 trillion can be generated because the distributed ledger has the ability to share information among different financial entities alongside supply. In return, the market will experience accountability and credibility since trade barriers in the business will be eliminated.
Asian SMEs Major Beneficiaries
Asian countries have been taunted to be the main beneficiaries if blockchain technology is integrated into the financial system. The current trade deficit is standing at $105 billion. This comes at a time when China and Hong Kong are planning to roll out blockchain-anchored trade finance platforms with the aim of boosting SMEs.