On the sands of Arrakis and the bustling markets of feudal Japan, trade is the lifeblood of society.
Just like the characters in dunes and general Companies that have navigated a complex web of alliances and commerce face similar challenges in today's complex global trade environment.
However, it is blockchain technology that is taking on the challenge of revolutionizing and modernizing trade finance as supply chains become increasingly complex, offering innovative solutions to persistent trade finance gaps. .
Trade may sound like a complicated topic, but two recent releases on the subject have attracted large audiences. Dune: Part 2 Box office revenue exceeded $490 million, general It received 9 million streaming views worldwide, making it the highest worldwide debut ever for a Disney General Entertainment scripted series.
Today, in the real world, trade is expanding across the globe, creating challenges for micro, small and medium enterprises (MSMEs) who need funding to support their operations.
Recent interest rate increases and credit tightening have made managing capital needs even more difficult, and increased production and borrowing costs have squeezed companies on both sides of the book.
Current financial institutions are unable to adequately meet these demands on their own, especially in regions that lack adequate banking capabilities. It is clear that the traditional banking system has not kept up with the needs of the global supply chain.
Introducing blockchain.
Blockchain provides financial institutions with the ability to leverage distributed ledger technology and digital asset solutions to provide sufficient supply for excess capital demands. As such, the most widespread and influential use case for blockchain will be in the trade finance industry.
The $5 trillion trade finance gap represents the collective difference between capital demand and capital supply for global shipping, preventing the flow of capital where it is needed most: to MSMEs.
Reflecting the struggles of small traders General's In ancient markets, MSMEs are disadvantaged by inefficiencies, lack of visibility, and centralized systems that hinder access to finance.
As a decentralized and transparent ledger, blockchain has emerged as a powerful tool to address the shortcomings of traditional trade finance. It is clear that the most widespread and influential use case for this technology is in the trade finance industry.
Blockchain creates new opportunities and new rails for suppliers, buyers, banks, and non-bank originators to conduct commerce in real time while preserving immutable data, records, capital and digital representations of real-world assets. Masu.
As governments around the world realize this potential, blockchain's role in global trade will become increasingly essential. We are already seeing this with the United Nations Model Electronic Transferable Records Act (MLETR), which allows transferable documents and documents in electronic format, and other regulatory advances in Europe, Asia, the Middle East, Africa, and South America .
Unlike Dune's with Arrakis General's On the shores of feudal Japan, our modern trade networks are thriving, helping to meet the growing demands of our suppliers and ease the disruption of the pandemic era.
Blockchain also offers the greatest opportunity for MSMEs, originators, and investors who have been at the forefront of global supply chains to move beyond outdated models and build a new, vibrant ecosystem for their businesses. And once user-friendly interfaces become more widespread, blockchain's momentum will become truly unstoppable.
Please see the Opinions section for more information. Blockchain is really better than intermediaries
One would think that given these opportunities, people in blockchain and the crypto space would embrace its power to create new rails for building businesses and expanding the economy. However, there seems to be a big misconception about the potential of blockchain. Or perhaps there is a lack of understanding of trade finance and its value proposition.
In contrast, investing in the most popular meme coins is an easy proposition to understand. This is the blockchain conundrum. Users want the excitement of a frenetic market rather than a gradual path to trade finance adoption.
The path is even more difficult for protocols that gain support from those in the space who do not understand the trade finance value proposition of blockchain. This restrictive mentality does not solve the problem of how to fund his MSMEs around the world and in turn feed back value to the blockchain network.
After all, our psyche must be rooted in this question. How can we create more equal ways to help all boats rise and ensure everyone succeeds?
We do that by making blockchain more accessible to more people. Everyone wins, including those who want to own meme coins and those who want to create a better way for businesses around the world to grow and prosper. Or some people want both.
Billy Sebell is Executive Director of the XDC Foundation and an early contributor to the XDC Network. Since the beginning of 2018, Billy has been working on developing the XDC community with a focus on growing the ecosystem and network and implementing use cases in trade finance. Billy previously spent more than 25 years in the manufacturing and consumer products sectors, addressing the challenges businesses face in capital markets and international trade.
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