Blockchain, or distributed ledger technology (DLT), is a decentralized digital network of records that can be simultaneously accessed by all permitted users and that are automatically updated and validated if an authorized change is made. All changes are time-stamped and DLT transactions are based on consensus, replication, and immutability. This provides a high level of security, even in transactions where parties do not know each other or have other verification tools.
Blockchain technology holds the potential to facilitate trade transactions and access to finance, along with reducing costs. By providing an immutable record of transactions, MSME with access to IT infrastructure and the right digital know-how may be able to use this technology in their international trade dealings or provide alternative documentation to verify their credibility when trying to access finance. From identity management to smart contracts, a Finextra article entitled Blockchain: A game-changer for Small and Medium-sized enterprises provides additional information on the benefits of blockchain for MSMEs.