Geneva [Switzerland], September `15: The WTO launched a new publication on the role of stablecoins in supporting cross-border trade on Monday on the sidelines of the WTO's first World Trade and Tech Day.
The report, prepared by the Economic Research and Statistics Division and the Trade in Services and Investment Division, examines the opportunities and challenges associated with the use of stablecoins in facilitating international trade, highlighting how they can accelerate cross-border payments and their potential to increase participation in the international trading system, especially for developing economies.
In her foreword to the publication, Director-General Ngozi Okonjo-Iweala says: "The WTO has long provided a forum for members to discuss transformative technological developments that influence the conduct of trade. By analysing emerging technologies from a trade perspective, the WTO Secretariat seeks to contribute to informed policymaking and to support members in navigating an increasingly digital global economy.
The report highlights the growing potential of stablecoins for use in international trade transactions. Originally developed to reduce the volatility associated with cryptocurrencies, stablecoins are increasingly being used for payments, remittances, and business-to-business transactions. They can help address persistent frictions in cross-border payments, notably by accelerating settlement times, lowering transaction costs and increasing transparency for consumers. As a result, stablecoins have the potential to ease trade related international payments, particularly benefitting traders who face difficulties in using traditional cross-border payment tools.
The report also stresses that stablecoins may face significant regulatory, operational and trust related challenges that must be addressed before they can achieve broader adoption. As with many technological innovations, their potential will depend not only on their technical capabilities and interoperability across jurisdictions, but also on the existence of appropriate governance frameworks.
''We hope that this report will contribute to the discussion on how to harness technological innovation in ways that make international trade more efficient, inclusive and resilient. As members continue to explore the opportunities and challenges presented by new payment technologies, the WTO will remain a forum for dialogue, analysis and cooperation on issues that shape the future of international trade,'' Director-General Ngozi Okonjo-Iweala says.
Source: Emirates News Agency