DLT may add $1trn to world trade in next decade
A new report from the World Economic Forum (WEF) and Bain & Company claims distributed ledger technology could add $1trn to world trade over the next decade.
The benefits of adopting DLT for trade will affect everyone from banks to companies to governments to consumers, Gerry Mattios, report contributor at Bain & Company said. “But action has to be taken in a collaborative way and with an ecosystem approach in mind. Individual actions won’t bring the expected results.”
Antiquated systems need to be shaken off
The WEF is particularly concerned that archaic processes pose a significant obstacle for small and medium-sized enterprises (SMEs) and trade with emerging markets.
“Transforming paper-based documentation into electronic formats and applying smart tools and technologies help to reduce trade barriers and improve processing times at borders, particularly for small businesses and companies in higher risk developing countries.”
Currently there’s a global trade finance gap of $1.5trn, or 10%, which may head higher to $2.4trn by 2025 claims the Asian Development Bank. But Bain & Company and the WEF think this gap could be slashed by $1trn if DLT is deployed.
Governments to take initiative?
The new report makes it clear to governments that it is up to them to push DLT use forward, sooner rather than later. “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 added.