According to new (joint) research by the World Economic Forum (WEF) and Bain & Company, blockchain has an ability to fill in much of the $1.5 trillion dollar supply-demand gap in global trade finance only by easing financing for small and medium-sized enterprises (SMEs) in emerging markets.
In times when the global trade finance gap is at $1.5 trillion and is estimated to grow to $2.4 trillion by 2025, the research explains that the issue largely arises from limited access to credit and loans for SMEs that are looking to expand their businesses.
The researchers also argue that the missing funding can be reduced by $1 trillion if blockchain “is used more broadly” since the distributed networks are able to share business records across financial institutions and with that bring transparency to the credibility of businesses.
As the researchers wrote:
“They would help mitigate credit risk, lower fees and remove barriers to trade. If implemented, the main beneficiaries are set to be SMEs and emerging markets, which suffer most from a lack of access to credit and have ample room to grow trade. “
On top of this, the researchers added that a blockchain-based trade finance system would be beneficial to Asian economies as they account for 7% (or $105 billion) of the global trade finance gap.
China’s Ping An Insurance Group To Build A ‘Smart City’ By Using Blockchain Technology
Blockchain ‘Smart Money’ Trialed By Australia’s Science Agency And Commonwealth Bank
“Our use of blockchain added new kinds of programmable behaviors to the smart money in the prototype system. This automation and flexibility could reduce friction and enable greater innovation in many payment environments and unlock network-effect benefits. This could include more directly connecting citizens to public policy programs, empowering people to optimize their spending through things like smart savings plans and smart diets, and reducing costs for businesses, including through the potential for self-taxing transactions.”This is not the first blockchain trial where the CSIRO was involved. Previously, the organization collaborated with the University of Sydney, testing a blockchain application on the cloud infrastructure platform of Amazon Web Services - finding that the application was able to achieve a speed of 30,000 transactions per second.
Iran Gets Removed From SWIFT, Considers Switching To Crypto As Planned
“The US has gone rogue, and cannot be allowed to dictate economic or political policy to the rest of the world. The sooner the rest of the world develops an alternative payments system – possibly working through SWIFT, but using a basket of currencies as the basis for a supra-national unit of exchange – the better. The USA is big enough to bully what should be an impartial means for monetary transactions between countries. This should not be possible.’’However, the Iranian Parliamentary Commissioner of Economic Affairs, Mohammad Reza Pourebrahimi, said that the country is working on a plan to involve cryptocurrencies as international payment methods cooperating with Russia. Already multiple businesses in Iran such as HotelsinIran which is a major booking platform started accepting cryptocurrencies as a payment method. Many experts believe that this is a perfect way for cryptocurrencies to gain mass adoption in Iran.
Amazon Wins Two Patents, Aims On Improving Distributed Data Storage/Signatures Protection
“The Merkle Root summarizes all of the data in the related transactions and is stored in the block header. It maintains the integrity of the data. If a single detail in any of the transactions or the order of the transaction's changes, so does the Merkle Root. Using a Merkle tree allows for a quick and simple test of whether a specific transaction is included in the set or not.”Amazon proposed the same Merkle Tree structure aiming to solve how to delegate signing authority from a central entity to multiple subordinates that will be authorized. The second patent that was first filed in December 2015, aims to solve issues related to distributed data storage. The patents suggest that these methods can help reduce storage redundancy but still allowing maximum availability. Amazon also filed for other crypto-specified inventions but we will find out more about them in the near future.
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