The birth of blockchain technology and its quick adaptation have left many people stunned, with famous CEOs, investors, entrepreneurs and financial experts often talking about how it will change the way we go about our daily financial activities.
One of the most important aspects to consider in blockchain technology is how this relatively new technology can help improve globalization — i.e., the process of interaction and integration of people, companies and governments worldwide.
One of the most important things in the global economy is the movement of goods and services. Currencies are used to facilitate these movements, but issues such as high inflation rates and currency manipulation techniques are making a lot of people worried about the validity of traditional currencies.
Immutability could make cryptocurrencies the right tool to facilitate the movement of goods and services. Even though some government officials argue that the speed and network congestion of cryptocurrencies are hindering them from being adopted as a tool for globalization, many projects have started to disprove these assumptions. This is making cryptocurrency a globalization tool that people can trust.
Globalization is unfolding at a tremendous rate due to the flow of digital information. Analysis firm McKinsey & Company recently published a report in which it said that “digital flows — which were practically nonexistent just 15 years ago — now exert a larger impact on GDP growth than the centuries-old trade in goods.”
The flow of information is not limited by borders or national policies, and this is most pronounced in the use of decentralized blockchain technology. The most difficult aspect of managing cross-border transfers is to ensure compliance with the legal frameworks of different countries, each of which has its own unique set of rules, tax code and other legal norms that make it difficult to conduct business between different countries. Blockchain technology, by its nature, is not tied to any nation: As a peer-to-peer technology, the transfer of assets on the blockchain can be freely managed across borders.
The development of blockchain tech allows small businesses to create international companies. In fact, the blockchain erases the boundaries between large and small businesses, giving both the opportunity to appeal to the global community.