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Blockchain Can Add $1 Trillion to World Trade by 2028

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World Trade

Distributed ledger technology (DLT) has the potential to add $1 trillion to world trade by 2028.

That’s according to a report by the World Economic Forum (WEF) and Bain & Company.

The report, “Trade Tech – A New Age for Trade and Supply Chain Finance” found:

“Distributed ledger and other technological innovations promise groundbreaking advances in trade and supply chain finance by reducing costs and ease of use,” it notes.  “[Approximately] 30% or $1.1 trillion of new trade volume will result due to DLT removing barriers.”

“[Approximately] 40% or $0.9 trillion of traditional will move to DLT for better service levels and lower fees.”

World Trade Statistics

WEF and Bain predict that the DLT will usher in a new era of trade and close the current gap in trade finance. The latter is of the order of about $1.5 trillion.

The report has strong messages for governments. It argues that for agencies within EU and other structures, it is essential to embrace DLT.  “They should include distributed ledger technology as part of any relevant, forward-looking regulatory considerations, such as cross-border food imports.”

“With some governments already starting to make these moves, the laggards will become increasingly disadvantaged,” it says.

Battling Challenges

In addition, the report also mentions how outdated processes present major challenges for SMEs (Small and medium-sized enterprises).

Furthermore, it is important to transform documentation reliant on paper into electronic formats. The report recommends the use of “Smart tools and technologies” to remove trade barriers and improve the processing times.

This will particularly benefit the small businesses in the developing countries.

To sum up, the article mentions the role Distributed Ledger Technology (DLT) can play in influencing the international trade sector.

The study takes the form of a white paper and can be accessed online on the website of the World Economic Forum. A must read for those who wish to delve deeper into the future of international trade and the role of DLT.

 

 

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