In today’s world, the payment process in international trade is very complicated. For example, general wire transfer payments go through multiple institutions such as remittance banks, central banks, correspondent banks, and more, and each of these agencies has their own sets of procedures and processes. Needless to say, the entire payment process is very time consuming and inefficient, and the settlement cost is high. At the same time, it also faces certain risks.
The current blockchain technology can logically solve the payment problems encountered in international trade. Blockchain enables a decentralized, trusted mechanism to complete the entire process of cross-border payments.
According to McKinsey's 2017 data, the cost of completing a cross-border payment through an agent is generally $25-35, which is more than a dozen times that of domestic liquidation. If it is done through blockchain technology, then the entire transaction process will be intermediated, and there will be real-time monitoring, reducing the intermediate cost. In addition, usually a cross-border payment transaction takes more than one day to complete. The blockchain technology is automated, does not require much manual processing, and can be processed 24 hours a day, and it is expected to take only a few minutes to complete the transaction. More importantly, in traditional trade transactions, the ability to identify customers is limited. The blockchain technology can safely manage the identity of customers and meet the standards of anti-money laundering supervision, providing more efficient services for KYC processes.