$BTC $ETH $BNB Trade finance’s financing gap and paper-based inefficiencies create blockchain’s largest opportunity. Tokenized receivables can unlock global liquidity for SMEs.
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Written by Billy Sebell,Contributor
Reviewed by Cath Jenkin,Staff Editor
Trade finance is the biggest opportunity in blockchain
Jan 21, 2026
Trade finance’s financing gap and paper-based inefficiencies create blockchain’s largest opportunity. Tokenized receivables can unlock global liquidity for SMEs.
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Opinion by: Billy Sebell, executive director at XDC Foundation
In just over a decade, blockchain technology has rewritten the rulebook for global finance, bringing transparency, speed and access to financial markets. It has clearly established its worth in digital assets, decentralized finance (DeFi) and cross-border payments, among other effective use cases.
Perhaps the greatest unrealized potential for blockchain lies in one of the world’s most vital sectors: global trade finance.
Trade finance, the capital and credit that enable goods and services to move across borders, forms the backbone of the global economy. It’s a $9.7-trillion market yet remains highly inefficient, paper-based and largely inaccessible to small- and medium-sized enterprises (SMEs).
This combination of size, importance and friction makes trade finance the largest real-world opportunity for blockchain, creating the potential to solve inefficiencies while opening entirely new markets for investors and institutions alike.
The scale and the gap
Despite being one of the world’s oldest financial systems, trade finance has seen limited modernization. Nearly 90% of global trade value relies on financing mechanisms like letters of credit, bills of lading and invoice factoring. As a result, an estimated $2.5-trillion global trade finance gap affects countless businesses, mostly SMEs, which cannot access the credit they need to grow.
When small manufacturers or exporters can’t secure trade credit, they can lose contracts and face slower production. The result is fewer jobs, limited supply chains and reduced economic inclusion. Solving this financing gap could spur enormous economic growth. Blockchain is the first technology fully capable of accomplishing what has previously been out of reach.
Trade finance and blockchain are a perfect match
The trade finance sector is plagued by inefficiency and fraud. Each shipment of goods can involve 10 or more parties, including banks, insurers, shippers and customs agents. Reams of paper documents must be reconciled and verified manually, with these analog processes often responsible for delays, errors and duplication.
Blockchain can provide solutions to these pain points directly by replacing manual, paper-based processes with digital, tamper-proof workflows. As trade documents, including invoices, purchase orders and bills of lading, are recorded onchain, parties across the supply chain can verify the authenticity of a document without relying on intermediaries, thereby reducing fraud and costly delays. This level of digitization is particularly valuable in cross-border trade, where inconsistent standards and fragmented systems can slow commerce.
Tokenization builds on this foundation by converting trade assets, such as receivables, into digital assets that can be easily transferred and settled instantly. And instead of being locked in local markets or bank portfolios, these assets become accessible to a global pool of investors. For exporters and partners, the result is deeper liquidity and greater access to capital. For SMEs in emerging economies, this offers a new path to financing, as tokenized trade assets provide a bridge between real-world economic activity and global digital markets. This enables capital to flow where it’s most needed.
As numerous asset classes have already gone digital, it appears that trade finance is likely the next sector to follow suit. Tokenized US Treasurys, bonds and funds have grown into the tens of billions of dollars. It is estimated that private credit will comprise $1.6 trillion in tokenized assets, where trade finance is a $9-trillion industry, highlighting a clear opportunity for this sector. This imbalance highlights a unique position: The next wave of tokenization will be driven by real-world assets that fund real economic activity.
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