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A $2.5 Trillion Trade Crisis Is Brewing — IOTA Might Be the Only Real Solution

crypto-news-flash.com

7 hour ago

A $2.5 Trillion Trade Crisis Is Brewing — IOTA Might Be the Only Real Solution

Traditional trade systems remain heavily reliant on paper documentation, siloed databases, slow verification, and opaque intermediaries. The fee-less nature of IOTA is a big advantage for micropayments, IoT, and target="_blank" rel="nofollow noopener">U.S. Geological Survey (USGS) shows that China produces about 70% of the world’s rare earth minerals (REMs), including key materials like copper, lithium, and cobalt, making most nations reliant on Chinese supply. This dependency, combined with deep structural weaknesses in global trade finance, exposes vulnerabilities in the global system. Analysts, like ID.iota, warn that a $2.5 trillion trade finance gap, representing the shortfall in funding needed to support trade, could be the tipping point for a large-scale breakdown in how goods move across borders. The analyst goes on to question, But why aren’t Vietnam or Africa increasing their REM outputs? Beyond refining know-how and environmental constraints, the biggest barriers are logistics and the global Trade Finance Gap. The answer comes down to two hurdles. First, financing: Western lenders are now bound by strict Environmental, Social, and Governance (ESG) standards, which makes investing in REMs, a toxic and often radioactive business, deeply unattractive. Then there’s logistics. Even if a mine can produce the materials, it still has to find buyers and move those minerals across complex global supply chains, a challenge for smaller producers without established trade networks or financing in place. Why IOTA Is Being Brought Into the Conversation Trade Worldwide Information Network (TWIN) is a digital infrastructure built on IOTA’s distributed ledger technology (DLT)that was launched on May 8, in partnership with TradeMark Africa, the World Economic Forum, and the Tony Blair Institute. It provides a neutral, open-source platform for businesses, governments, and other trade actors to share and manage data in real-time, moving away from fragmented, paper-based processes. ID.iota explained that TWIN is the perfect fit for this trade gap. To begin with, Africa has the rare earth resources that can challenge China’s dominance. The problem is that miners in Africa or elsewhere struggle to sell and export their materials because international trade is full of red tape, financing hurdles, and long payment delays. Salus steps in as the trusted middleman, a platform designed to handle the complex parts of global trade so others don’t have to. It connects funders and suppliers through secure, transparent, on-chain transactions, ensuring every deal is verified and traceable. Through TWIN, Salus registers these digital identities and credentials directly on the IOTA ledger, creating a trusted data trail. It also leverages IOTA Smart Contracts to automate key trade finance tasks like transferring ownership and managing collateral. And thanks to IOTA Move, participants can execute these smart contracts seamlessly through the Salus dApp, without needing to buy or manage IOTA tokens. To make this work, Salus uses IOTA Identity, which manages digital details such as the content, weight, and origin of each shipment. With decentralized identifiers (DIDs) and verifiable credentials, every participant in the system can be uniquely verified. “So what does this mean for $IOTA? It becomes the digital backbone of global trade, logging every shipment, every border crossing, every customs clearance, transparently and immutably on the chain.” He says, We are talking about billions of Dollars in trade volume in the coming years. Billions of dollars in on-chain tokenized receivables. Billions in settlement TVL. We’re talking about hundreds of millions of transactions per year.

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