Can XDC Network Digitize the $30TN Outdated Trade System?

The global trade finance system is still employing fax machines and paper documents, even though it is worth more than $30 trillion a year. A lot of financial institutions and trade platforms still use manual, old-fashioned methods that make transactions take longer and cost more.

Now, a blockchain platform called the XDC Network claims it can help modernize the system by replacing paperwork with digital tools that are faster, cheaper, and more secure.

A Costly and Outdated Process

Trade finance helps companies import and export goods by providing credit and risk protection. It is one of the most important parts of the global economy. But today’s system is highly inefficient. Many transactions rely on original paper documents, which are sent by courier or faxed between parties.

This has created problems across the industry. The World Trade Organization and the International Chamber of Commerce have pointed out that small and medium-sized businesses are often shut out of trade because of slow processes and limited access to financing. The trade finance gap is now estimated at $2.5 trillion.

The XDC Network’s Solution

The XDC Network is a blockchain technology designed to facilitate trade finance. It employs a Delegated Proof-of-Stake (DPoS) method, which enables it to handle a large number of transactions swiftly, with minimal energy consumption and costs. You can create and save trade documents such as bills of lading and letters of credit on the site.

 Utilizing secure blockchain technology, these documents can be instantly shared with the relevant parties. This reduces the number of hand-written documentation required and aids in the prevention of fraud. Smart contracts allow the XDC Network to automate critical elements of trade agreements. This speeds up and improves the accuracy of the procedure.

Real-World Adoption

Platforms like TradeFinex, Contour, and TradeLens are already using the XDC Network. These platforms let banks, exporters, importers, and other partners handle trade paperwork and money in a completely digital setting.

TradeFinex is built directly on the XDC Network. It helps financial institutions connect with businesses to offer trade financing. Documents and payments are processed digitally, cutting down on delays.

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Contour and TradeLens, two other major platforms, have also worked to integrate blockchain into their systems. XDC is being used to make sure documents are trustworthy and easy to track.

Building Trust Through Standards

The XDC Network is trying to follow the rules and standards set by other countries. This means working with the Digital Standards Initiative (DSI) and the International Chamber of Commerce. These groups back using digital tools to make trade easier around the world. 

XDC makes it easy for banks, governments, and businesses to use blockchain technology with trust by following these criteria.

Glossary

Trade Finance: Financial tools that help businesses import and export goods
XDC Network: A blockchain platform designed for trade and enterprise use
Blockchain: A secure digital ledger that records transactions
Smart Contract: A program that runs automatically when conditions are met
DPoS (Delegated Proof-of-Stake): A fast and energy-efficient way to confirm blockchain transactions
Tokenization: Turning real-world documents or assets into digital form

FAQs

Why are faxes still used in trade finance?
Because many legal and financial systems require original documents, and some still accept fax as a valid form of submission.

How does XDC improve the process?
XDC digitizes documents and allows them to be shared instantly using blockchain. This saves time and reduces errors.

What is DPoS, and why does it matter?
DPoS is a way of confirming transactions quickly and securely without using a lot of energy. It helps blockchain platforms like XDC handle high volumes of data.

Is XDC being used in real trade systems?
Yes. Platforms like TradeFinex, Contour, and TradeLens are already using the XDC Network to process digital trade documents.