How blockchain and digital assets can open up trade finance

While businesses in many developing regions face a shortfall of growth capital, new technologies are enabling more finance from global investors.

13 March 2025

5 mins

IndustriesFinTechTechnology

The difference between businesses’ credit needs and the finance they can access, known as the global trade finance gap, continues to grow at an alarming rate. In 2022, the gap was estimated to be USD2.5 trillion, a figure that leapt by 47 per cent between 2020 and 2022 as companies struggled to afford elevated interest rates and many in developing markets faced barriers to accessing financial services.

These issues mean that many companies, particularly newer or smaller ones in the value chain, cannot access finance because they lack collateral and risk-averse creditors feel uncomfortable without access to a clear cashflow history.

The growth of blockchain and digital assets

Blockchain is one of the newer tools helping investors, such as insurers and asset managers, to assess opportunities and seamlessly provide fair and rapid finance to businesses globally, including those in the developing world – a change expected to help close gaps across the global finance landscape. A digital ledger, blockchain is among the technologies seen as most critical in this area because it provides a secure and transparent transaction record, reducing investor risk and increasing efficiency across the lending process.

“It’s recognised that [blockchain] can bring value in all businesses,” said Bernard Ferran, Chief Commercial Officer at financial settlement business Euroclear, during a 2025 panel discussion in Davos, hosted by Standard Chartered and the Financial Times. “It helps the reconciliation,” he explained. “It’s more about the dissemination of the information, using the same golden source from a corporate action, for example. You take the information directly from the issuers, [and] you can disseminate that to the investors.”

Also present was Roberto Hoornweg, Co-head of Corporate and Investment Banking at Standard Chartered, who added: “Cryptocurrencies and digital assets can revolutionise international payments and help more businesses sell to the world, especially in the low-value cross-border payment segment – currently the fastest growing one – which is presently costly and underserved by financial institutions.”

Cryptocurrencies and digital assets can help more businesses sell to the world.

Roberto Hoornweg

Co-head of Corporate and Investment Banking at Standard Chartered

Meanwhile, tokenisation, or digital representations of assets, is likely to create efficiencies not just in trade finance, but also in capital markets and financial market infrastructure as a whole. “Tokenisation of assets is something that we can expect to grow, because it makes transaction costs cheaper and makes titles far clearer. It reduces operational risk and [the risks] for financial assets,” Hoornweg said. “By transforming trade assets into transferable instruments, we can unlock a level of liquidity and accessibility that was previously not achievable, and help the ‘missing middle’ gain access to vital capital.”

The interoperability and security of blockchain – and the digital assets based on the technology – would be key to their success, the panellists argued. “On the blockchain today, there’s no standard in terms of interoperability, so we need to fix that first, to scale it up,” Ferran said, adding that blockchain-based processes would likely co-exist with legacy methods for some time.

He added: “The security aspect, the fiduciary aspect, is extremely important. You need to be able to demonstrate to regulators that you are as safe with a token as in the traditional world today (…) You [also] need to give confidence to be able to scale that market.”

An appetite for emerging opportunities

Increased market access, transparency and more attractive risk profiles all appeal to funds seeking to diversify their portfolios amid sluggish global economies. Uptake is expected to be strong: by 2026, for example, Standard Chartered estimates that overall digital asset market capitalisation will reach USD10 trillion.

Standard Chartered itself is helping advance adoption through several large cross-border initiatives. Its blockchain-based Olea platform with Linklogis enables the connection of small businesses with global investors, while its investments in tokenisation schemes such as Singapore’s Project Guardian and Hong Kong’s Project Ensemble, and the Bank for International Settlements’ mBridge project for central bank digital currencies CBDCs, are all essential to further opening up global trade.

Critical to the success of tokenised assets is the availability of tokenised forms of cash such as stablecoins and tokenised deposits. In February 2025 Standard Chartered announced its intent to issue an HKD-based stablecoin regulated by the Hong Kong Monetary Authority and is also a lead participant in the Partior distributed ledger technology payments network. The bank has also expanded real-time payment capabilities to several markets, conducted a successful pilot of its blockchain-based international payment network, and has begun offering custody services for digital assets for financial institutions in the UAE and Luxembourg.

Looking ahead, Hoornweg is confident of substantial growth in these types of assets over the coming decades, as blockchain adoption rises. While regulatory advances and smart execution would be needed for success, he noted: “The amount of efficiency and value it can release, and therefore the amount of growth it can generate, is a very, very significant prize that we should go after.” 

This content was paid for by Standard Chartered and produced in partnership with the Financial Times commercial department.