The COVID-19 pandemic has triggered the adoption of blockchain and DLT-based business solutions in the global trade ecosystem.
As the coronavirus pandemic continues to push more people out of their offices, many companies across the globe are adopting decentralized ledger technology to mitigate its effects and remain operational.
Emmanuelle Ganne, senior analyst at the World Trade Organization, told Cointelegraph that “The current pandemic, which has a devastating impact on small businesses, is an opportunity to accelerate trade digitalization, to the benefit of SMEs in particular.” Ganne added: “DLTs have the potential to remove many of the inefficiencies that hinder international trade and to slash trade costs, which weigh more heavily on small firms, a fortiori in times of crisis."
Deepesh Patel, editorial director at Trade Finance Global — a financial broker — believes that “A fully digitalised global trade ecosystem will be seamless and interconnected and probably open source.”
The trade finance gap
As the global economy continues to be shaken by the pandemic, it’s clear that the most affected businesses are small- and medium-sized enterprises facing the “trade finance gap,” which is a deficit that keeps businesses from performing due to a lack of adequate funding necessary to run operations.
What’s more profound is the fact that the trade finance gap was estimated to be $1.5 trillion US dollars prior to the COVID-19 pandemic, and that number is expected to go up to about $3 trillion or $4 trillion.