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Crypto in International Trade

Crypto in International Trade

Even though Industrial Revolution 4.0 is on its early stage, the way we live, work, and interact have fundamentally changed.

Moreover, it is inevitable that technologies like Blockchain and AI are here to stay. According to experts, the will energize The Fourth Industrial Revolution.

Technological innovations are crucial for global economic conjuncture; trade and international trade are аn evident empirical case. Trade has always been shaped by technological innovations which enable faster change and progress. According to most investors and market specialists, the brightest technological innovation for this industry in the Fourth Industrial Revolution might be Blockchain and cryptocurrencies.

During this year, several significant developments have already happened in the global crypto market that ensure; cryptocurrency adoption is happening right now.

Day by day, different companies take significant steps forward to commonplace adoption.

Since 2016 till 2018 we have noticed just a few announcements about minor and big companies who were ready to accept cryptocurrencies as a payment method.

In 2019, Germany’s most popular home food delivery app, Lieferando, began accepting Bitcoin as a payment method. Furthermore, Rakuten, often referred to as “Japan’s Amazon,” will be launching its cryptocurrency exchange in the coming months.

The first in history, Argentina and Paraguay, the third and eleventh largest economies in South America, signed a trade agreement on Bitcoin.

To settle the deal, Paraguay has bought pesticides and fumigation products worth $7,100 from Argentina.

It was the first time that two significant nation-states settled trade in crypto.

The good news just keeps flowing! Already large merchants like Starbucks, With Wholefoods, Nordstrom have begun accepting cryptocurrency payments in the form of bitcoin, ethereum, bitcoin cash, and Gemini dollar.

This awaited progress is made with the help of US-based payments startup Flexa and New York-based crypto exchange Gemini. The payment works via Flexa’s Spedn mobile app.

Over the years, there were many retail giants that have integrated crypto, though because of the volatility of cryptocurrencies it didn’t last long. So, will this be one that works out?

These developments prove that after years of skepticism about their security, value, and validation, it seems that cryptocurrencies like Bitcoin are ready to take on world markets.

Advantages of cryptocurrencies over traditional currencies for trade and especially for international trade aren’t few.

First and foremost is simplicity. You trade with the same currency and there is no exchange rate. When the company trades in different countries rising the big headache for managers. Different countries with different exchange rates add to the difficult buying and selling process additional complicity. With Bitcoin (or other cryptocurrencies) the problems with this barrier disappear as Bitcoin provides one single currency for everyone in the world to trade.

The other obstacles that cryptocurrencies take away are high fees with a long waiting time. With the banking system, sending and receiving money takes days, with Bitcoin and other cryptocurrencies it happens if not immediately then surely not during a few days.

The absence of transactions fees is the most favorable one for companies and not only. Dealing with banks for money transaction, businesses might pay high transaction fees. The P2P model of cryptocurrencies solve this problem too, as it removes third parties like banks, so there are no transaction fees.

While there are already significant steps made by some countries and big companies to adapt cryptocurrencies in our life, there still exist legal and cultural obstacles to overcome.

Cryptoenthusiast will say it’s only a matter of time for cryptocurrencies to take a trading industry.

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