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Blockchain is able to fill most of the $ 1.5 trillion gap in supply and demand in global trade finance by facilitating funding for small and medium-sized enterprises (SMEs) in emerging markets, says new research .
conducted and published by the World Economic Forum and Bain & Company, research indicates that by distributing blockchain, global businesses can generate an additional $ 1 trillion of commercial funding that would otherwise be lost.
According to an Asian Calculation Development Bank, the global trade financial gap is currently $ 1.5 trillion and is estimated to grow to $ 2.4 trillion by 2025. The research also explains that this problem stems largely from the 39. Limited access to credit and loans for SMEs who are looking to expand their businesses [19659003] Researchers say, however, that this missing funding can be reduced by $ 1 trillion if the blockchain "is used more widely ", since distributed networks are able to share corporate records acro ss financial institutions along the supply chain and bring transparency to the credibility of companies.
"They help mitigate credit risk, lower taxes and remove barriers to trade," the researchers write, adding:
"If implemented, the main beneficiaries will be SMEs and emerging markets, which suffer most from a lack of access to credit and a large margin of growth in trade. "
The researchers also added that a blockchain-based commercial financing system would be particularly beneficial for Asian economies as they account for 7% ($ 105 billion) of the commercial finance gap, with 75% of global document-based transactions across supply chains.
CoinDesk previously reported that the Chinese mainland and Hong Kong authorities both moved to launch blockchain-based commercial financing systems in an attempt to help SMEs gain more access to instrument financing and fraud prevention [19659002] WEF image through Shutterstock
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