Companies across the globe need to communicate and interact with each other in a way that’s efficient, collaborative, and trustworthy. Platforms like profit-builder.org offer numerous trading options and help you start the bitcoin trading journey without any dedicated training.
They can no longer rely on paper forms of communication to exchange information with their partners; digitalization is the only way their businesses will be sustainable.
However, trading goods and services internationally is not a simple process — there are additional challenges that international traders must face. These challenges include language barriers, different financial systems, and varying tax policies and procedures for international trade transactions.
The more these challenges are faced individually by different companies in the supply chain industry, the more time-consuming it becomes for all involved stakeholders to trade efficiently.
Cryptocurrency has a fascinating potential to connect everyone around the globe through its underlying blockchain technology. It is a global currency and decentralized, transparent, and secure enough to eliminate the need for third-party intermediaries.
It also enables data transfer speeds not achievable by traditional legacy systems. So, let’s discuss how cryptocurrencies can assist in digitalizing global trades.
Blockchain serving as a global supply chain:
Supply chains have become increasingly complex as international trade, outsourcing, and offshoring have accelerated over the last decade. As a result of this complexity, supply chains are becoming increasingly vulnerable to cybercrime. More than half of all companies surveyed by the Economist Intelligence Unit experienced a cyber-related security breach in recent years.
In addition to risks associated with connectivity, the internet of things (IoT) presents a significant new threat landscape for organizations to secure.
Blockchain is here to stay, and several promising projects are already in use or under development. These projects introduce transparency and functionality into the financial industry, making it easier for companies to transact and cooperate.
When combined with the Internet of Things (IoT) technology, blockchain is an excellent enabler for digitalizing global trades and supply chain industries. What blockchain brings to the table includes:
Speed of transactions with reduced operating costs: Blockchain can help achieve near-instant transaction results. It can also save high costs through its ability to retain accurate and secure records of transactions.
A unique opportunity for supply chain automation: Blockchains can already integrate with IoT devices, including those with embedded intelligent chips. It makes them ideal for conducting a wide range of supply chain processes and operations that require real-time connectivity and monitoring.
Security and transparency in a decentralized network: Every transaction on the blockchain is encrypted using cryptography, making it virtually impossible to tamper with data in transit.
Applications of cryptocurrencies in digitalizing the global trade:
Some of the many potential applications of cryptocurrency technology in international trade are:
International money transfer and remittance:
As mentioned earlier, international transactions require much more effort and cost than domestic ones. By using cryptocurrencies as a currency on the blockchain network, transaction costs can be minimized, and the time taken to complete them is reduced.
Supply chain-enabled KYC compliance:
Transfers between different companies in an organization may involve multiple intermediaries for various financial transactions, some of which involve high fees for third-party services. With cryptocurrencies as an accepted form of payment in many countries worldwide, these intermediaries will become redundant.
Supply chain management:
Supply chains are complex, and there is no one-size-fits-all solution. A cryptocurrency network provides a new way of managing supply chains, especially those involving the different entities that interrelate. In addition, the robust blockchain network on a cryptocurrency also makes it ideal for supply chain management.
Supply chain intelligence:
In the current era of IoT devices and sensors, supply chain data has become an essential requirement of many industries. Smart contracts on a cryptocurrency network can store and communicate this data more efficiently and automatically.
Innovative contract-powered decentralized marketplace:
Smart contracts on cryptocurrencies create an environment that offers greater trust between buyers and sellers and eliminates intermediaries in trade transactions.
Cryptocurrencies ease international transactions like a pro:
Cryptocurrencies and blockchain are still new, but businesses are increasingly accepting them worldwide. However, their potential, especially in the international trade industry, is still waiting to be unleashed.
Due to their global nature and decentralization, digital currencies and cryptocurrencies will continue to offer a lot of benefits for companies that are looking at ways of trading on a global scale. In addition, by adopting this technology early on in their business or supply chain operations, companies can take advantage of its tremendous potential for growth and efficiency in their business processes.
The use of cryptocurrency and blockchain technology will improve global trades’ efficiency, scale, and transparency in both directions by eliminating much of the need for intermediaries involved in these transactions.
Blockchain-based Supply Chain platforms can provide complete visibility into each transaction throughout the international supply chain, which will significantly facilitate the working with information, and exchanging data between participants in a complex network with multiple parties involved on different levels.