Blockchain, a relatively new technology, has emerged in recent years and has begun to gain popularity in a wide range of businesses. This technology is frequently hailed as having the potential to recreate how “trust” is perceived in the economy by eliminating the need for intermediaries such as banks and replacing them with mathematics or “code.” It is one facet of a complex digital ecosystem that is changing the way businesses, markets, and regulators interact.
While Blockchain impacts the financial industry in a diverse number of ways, it has an untapped potential to disrupt the old concept of trade finance by allowing it to transcend local, state, and national borders.
Through Blockchain we can get rid of all those layers and just pay for what matters, which is the product or service we require.
Let us have a look at how Blockchain technology has helped make the world a smaller place for businesses in the Fintech Industry and trade finance:
- Because Blockchain technology is internet-based, it does not require any special setup. Fintech companies using blockchain-enabled decentralized systems can make global transactions into simple, routine processes with only one requirement: internet connectivity.
- The usage of Blockchain and Distributed Ledger Technology can help facilitate cross-border commercial transactions that would otherwise be prohibitively expensive due to trade and documentation fees. It would also cut the amount of paper used and reduce delivery times.
- Payments between importers and exporters could be made in tokenized form using Blockchain technology, based on the delivery or receipt of products. Importers and exporters could use smart contracts to create rules that secure automatic payments and eliminate the danger of lost, delayed, or repeatedly mortgaged shipments.
- When Blockchain technology is used in trade finance, it can lead to increased trust between trade parties, as well as the ability to hide proprietary information such as price and trade secrets when appropriate.
Trade finance exists to help exporters and importers manage risks, offer loans, and participate in international trade. Even though it is an important aspect of the global financial system, it usually uses outmoded, manual, and written paperwork. Importers, exporters, and other stakeholders can benefit from Blockchain’s ability to streamline and simplify the complicated world of trade finance.
How can TraQiQ help?
At TraQiQ, we are well-versed with emerging technologies like AI, Analytics, Machine Learning, and Blockchain. Based on client needs and requirements for various domains, we can assist you in selecting the best option for your company and advancing it to the next level of its digital transformation ladder. For more information regarding our services please contact us.
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