Trade finance is a crucial element of global commerce, handling $30 trillion annually. However, it remains burdened by outdated systems reliant on paper documentation, such as faxes and wet-ink signatures, leading to a significant trade finance gap of $2.5 trillion. Small and medium-sized enterprises (SMEs) are particularly affected due to these inefficiencies, lacking access to necessary financing to compete globally. Recent developments, including alignment with the UNCITRAL Model Law on Electronic Transferable Records (MLETR) in some jurisdictions, aim to improve electronic documentation legality. XDC, a hybrid blockchain platform, positions itself to facilitate a smoother transition to digital by integrating with existing workflows and ensuring automation and liquidity through digital asset issuance. By representing traditional trade documents as digital tokens on XDC, automation and real-time verification become possible, opening avenues for non-bank capital. Although challenges such as legal harmonization and interoperability persist, the focus is shifting toward enhancing functionality rather than complete disruption of trade finance systems. Early implementations in Latin America and Asia showcase the potential for accelerated financing through blockchain solutions.

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