Earlier this week, the International Chamber of Commerce (ICC) raised concerns about the impact of the COVID-19 crisis on the functioning of the trade finance market. “ICC calls on all governments to take emergency measures to immediately void all existing legal prohibitions on the use of electronic trade documentation,” it said in a memo. The move could spur a shift to the enterprise blockchain trade finance platforms.
Specifically, most trade finance transactions require staff to review paper documentation, which is not viable if they’re required to work from home. Additionally, many postal services have been disrupted by the crisis.
A significant proportion of world trade relies on trade finance. The Bank for International Settlements (BIS) estimates the proportion is one third. So even if a business manages to stay operational during the current crisis, if the only bottleneck is trade finance, it’s enough to kill smaller businesses.
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