- This topic has 3 replies, 3 voices, and was last updated 1 year, 2 months ago by Rahul Talwar.
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February 7, 2023 at 10:04 am #1221Rahul TalwarParticipant
Can small and medium-sized enterprises (SMEs) in the IT sector have better access to trade financing via the use of blockchain technology?
February 9, 2023 at 10:07 am #1222Abigail AaronsonParticipantYes. Small- and medium-sized enterprises (SMEs) are almost 90% dependent on banking funding, which can lead to financial difficulties during financial turmoils. Blockchain technology is facilitating, speeding up and increasing the efficiency of these types of new-generation alternatives, such as DeFi tokens, flash loans, direct peer-to-peer lending and borrowing, low-cost capital via B2B (business-to-business), crowdfunding, and other public funding schemes such as Initial Coin Offerings (ICOs). Blockchain technology also has the potential to enable low-cost credit scores to get loans, and ICOs are a new type of crowdsourcing instrument that provides financing to projects by selling access rights to the products to be produced. Blockchain technology has many advantages, such as increased transparency, formality and traceability, decreased informal transactions, social transfers and welfare transfers, economic activity being recorded and formalized, transaction costs and risks being decreased, making transactions safer and secure, and increased sustainability.
However, there are also disadvantages and weaknesses, such as too many fund transfers toward digital wallets, Tougher identity verification mechanisms, limit controls on the highest amount users can hold, and complex and nontransparent credit markets. MSMEs can build a stronger support network, gain access to new opportunities, and navigate challenges more effectively.
February 10, 2023 at 10:08 am #1223Fabian TanParticipantYes, as far as I know, over 90% of small and medium-sized firms (SMEs) rely on banks financing, which may cause financial problems during financial crises. Flash loans, DeFi tokens, peer-to-peer borrowing and lending, low-cost financing through B2B (business-to-business), crowdfunding, tech stock delisting, or other public financing schemes like Initial Coin Offerings are facilitated, accelerated, and improved by blockchain technology (ICOs). ICOs are a new sort of crowdsourcing tool that finances ventures by offering access privileges to the things to be created, and blockchain technology might allow low-cost loans. Blockchain technology increases transparency, formality, and traceability, decreases informal transactions, social transfers, and welfare transfers, formalizes economic activity, lowers transaction costs and risks, makes transactions safer and more secure, and increases sustainability.
Too many financial transfers to digital wallets, tougher identification verification, limit limitations on the largest amount users may store, and complicated and nontransparent money markets are drawbacks. MSMEs may improve support, access new possibilities, and overcome hurdles.
February 12, 2023 at 10:09 am #1224Rahul TalwarParticipantThanks for the response
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