Apart from the investment interest in India, cryptocurrency is expected to see increased activity this year, with more avenues for its utility opening up, including banking services, trade, and remittances. Since March, when the Supreme Court allowed banks to deal with cryptocurrency exchanges, trading volumes have nearly quadrupled.
The underlying technology for trade and commerce
Trade-in goods involve multiple actors and are still paper-intensive, from trade finance to customs clearance, transportation, and logistics. Many people see blockchain as an intriguing tool for improving the efficiency of trade processes and assisting in the transition to paperless trade.
However, the difficulties to overcome are proportionate to the opportunities provided by technology. Blockchain is viewed as a potential game-changer for digitalizing and automating trade finance processes, particularly letters of credit, as well as for easing supply chain finance.
A number of banks are investigating the technology’s potential in collaboration with financial technology (fintech) startups and information technology (IT) firms.
Finally, the technology will only be able to reach its full potential in all aspects of cross-border trade transactions, from trade finance to customs, transportation, and logistics, which are digitalized and the semantics are aligned (i.e. what specific information is communicated by the data elements).
Because of the large number of actors involved, the transportation and logistics sector is actively looking into ways to leverage blockchain technology in order to develop trade platforms that could connect all actors along the supply chain, including banks and customs authorities.