The year 2020 is finally that year when cryptocurrencies and Blockchain technology have finally become mainstream. Governments, institutional investors and retail investors thronging to the new technology have set it up for success.
Even though Crypto and Blockchain tech has been in our world for more than a decade, 2020 saw it rising like a phoenix from the ashes. We can all thank the COVID-19 pandemic for the growing popularity of cryptocurrencies.
As more and more start to engage with the new technology, one of the crucial areas of its application has been found in the area of international trade. In this article, we look at how Bitcoin and Blockchain can help foster international trade and cooperation among nations.
5 Ways Bitcoin and Blockchain Can Help in International Trade: The List
Overcoming the Exchange Rate Problem
Anybody who imports and exports goods and services can always testify to the problem of currency exchange. For example, if someone wants to pay you from the USA, the payment transaction approval has to come through multiple authorities.
Everyone from the payment-processing gateway to the government takes commissions to process payments. This means that the final amount received by you has already been deducted to the tune of 15%-20%! As Bitcoin and Blockchain is a global currency, the valuation does not change.
Taxation and Commissions are Eliminated
Government authorities and financial institutions (both public and private) are smart enough to earn billions just through increased taxation and commissions. This is why most of them do not like cryptocurrency or encourage its use.
Bitcoin and Blockchain are decentralized and does not allow any interference from any authority. This helps end parties benefit from a highly centralized tax heavy structure. With commissions eliminated, businesses can get increased payments.
Secure and Safe Payment and Transaction Options
International businesses and financial transactions suffer from a number of cyber-attacks. This makes the payments very unsafe and prone to dangerous elements snooping into heavy volume transactions. However, this problem can be averted if you start using Bitcoin and Blockchain.
Ever since Bitcoin and Blockchain have come into being, the system is so impenetrable that it cannot be hacked. This means that defrauding artists and hackers will find it impossible to engage in any nefarious activities with regard to international trade.
Faster Transactions and Processing
As payments made on Blockchain technology do not have to pass through multiple authorities, the transactions are faster, leading to better business. Blockchain has recently shifted to the lightning network, making the entire transaction cycle even faster.
The entire processing and validation process take less than ten minutes. This is a major attraction for a number of big corporates who understand how faster transactions can help businesses grow. This page helps in faster transactions lead to reduced credit periods, which in turn leads to lower interest rates and payments for web development companies.
Transparent Record Keeping
How many times has someone told you- ‘No we haven’t received the payment’ or ‘I have made the payment; you will receive it in some time?’ This is an acute problem in business. However, when it comes to using Blockchain or Bitcoin technology, you can rest assured that this will not be the case.
Furthermore this is because all transactions are recorded on the distributed ledger. It means that if someone has made a payment, it will be visible to everyone on the block. Blockchain promotes greater transparency, builds credibility and fosters better cooperation.
The Final Words
Bitcoin and Blockchain technology is also one of the greatest inventions of the modern era. In the field of international trade and business, major financial players are studying their applications. Can you think of some other benefits of using Bitcoin and Blockchain for international trade? Let us know.