The Fourth Industrial Revolution is coming and it’s name deeply entwined with the nascent technologies such as the internet of things (IoT), blockchain and artificial intelligence (AI). These advanced technologies have a wide array of applications delivering the viable and most-needed solutions to major industry challenges with the help of disruptive approach.
The World Economic Forum has perfectly fitted the blockchains alongside with the other cutting-edge technologies into a narrow subject of supply chain finance underlying the international trade development.
According to the estimates provided in the WEF’s research, the current trade finance gap equals roughly 10% of global merchandise trade volumes representing $1.5 trillion worth losses. Left unsolved, the trade finance gap will rise to more than $2.4 trillion by 2025, Bain & Company reports.
The reasons behind such a waste largely stem from a limited access faced by the small and medium enterprises that apply for credit and loans required for business extension.
On the other hands, regardless of a company’s scope, the modern enterprises actively involved into the international trade suffer from paper-based, outdated manual processes that stand in the way of reliable, real-time information gathering and tracking required for credible financing decisions.
Therefore, based on a thorough analysis, the WEF sentenced the blockchain technology to be a barrier-breaker establishing seamless processes at the core of an effective and efficient cross-border ecosystem. Distributed ledger and other technological innovations promise groundbreaking advances in trade and supply chain finance by reducing costs and ease of use.
Bain’s modeling estimates that new digital technologies, especially distributed ledger technology, can reduce a large part of the observed gap, facilitating about $1.1 trillion of new trade volumes globally.
Moreover, the researchers stressed explicit importance of the disruptive digital ledger for Asian countries since almost three-quarters of total documentary import and export trade transactions originate or arrive in Asia.
It means that once a blockchain-based system integrates into the traditional trade and supply chain processes, Asian economies will receive a chance to unfrozen about $105 billion worth working capital that today is captured within the trade finance gap.
Step by step the global community begins to adapt the robust technologies. On daily basis Coinspeaker reports the last updates taken place within the industry. Recently the U.S-based major cryptocurrency companies and tech veterans have created the Blockchain Association conceived to lobby the interests of crypto-community in the halls of power.
In the meanwhile, the blockchains gain a legislative authority as the Supreme People’s Court of China has issued new rules, which state that blockchain records must be considered as legal evidence in the court.