By The naysayers will hate and the traditional investors still balk at the idea of blockchain as a valid form of transactional processing but recent research has shown that blockchain has the potential to fill a great deal of the $1.5 trillion supply-demand gaps in the global trade finance market. This, of course, is due to the fact that blockchain eases financing options for small and medium enterprises in the emerging markets arena.
The World Economic Forum and Bain & Company conducted and released this research together and their findings have shown that businesses that are willing to deploy blockchain strategies have the potential to generate an extra $1 trillion in trade finance that would otherwise just be a missed opportunity. 
Currently, the global trade finance gap sits at a whopping $1.5 trillion and is set to jump up to $2.4 trillion as early as 2025 according to an Asian Development Bank article. According to the this newly surfaced research, this is due to the limited access that SMEs have to credit and loans.
This missing amount can be reduced by up to $1 trillion argues the researchers if blockchain is adopted on a wider scale due to the fact that distributed networks are capable of sharing business records across financial institutions along the supply chain as well as bring transparency to various businesses credibility.
“They would help mitigate credit risk, lower fees and remove barriers to trade,” the researchers wrote, adding:
“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. “
The researchers went on to state that the implementation of a blockchain trade finance system could be advantageous to Asian economies as these economies amount to 7% ($105 billion) of the trade finance gap with 75% of global document-based transactions across their supply chains.
Do you think Blockchain could be the future of the trade finance gap? Let us know your thoughts.
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