However, a small fish exporter in Uganda can do business with a Hong Kong broker that supplies the mainland China market using the new blockchain financial system. The delivery of goods takes 8 days by ship, 10 hours by plane. Settlement takes at least 5 days using the traditional banking system, and less than 30 minutes using bitcoin. Therefore, executing a cryptocurrency trade brings at least a comparable jump in efficiency to what aviation brought to supply chains after WWII when the transition from sea to air logistics materialized. But if the information is public in the blockchain, and the settlement near real time in the context of international trade, where are the asymmetries that will allow financial intermediaries to profit? Fishermen in Lake Victoria are good at catching fish and want to be paid in Ugandan shilling (UGX). Merchants in Hong Kong have access to Hong Kong dollars, USD or RMB. They are 9135 kilometers apart, and they do not know each other. No one really wants to remove the intermediary to save money, in detriment of efficiency in sourcing of goods or payment settlement. But they do need to do business with someone they trust. The price of trust is the cost of business lost (not realized) if trust is lost (not secured).
Digital commerce
Cross-border deposits are an inconvenience for the majority of humanity. It is easy if one lives within the walled gardens of the internet: Amazon takes your money if you live in the US/EU, Alibaba if you live in China. But as the teams at the MIT's Collective Learning group and the Harvard’s Growth Lab point out, growth will not come from the West or even China, but from India and everywhere else. Nevertheless, consumers in the emerging world face great difficulties getting access to affordable credit cards that can work without problems all the time, everywhere — not even bitcoin debit cards are readily available because those are largely issued to European and North Americans, and also there, issuers are constantly limiting their use to purchase cryptocurrency. Meanwhile, a large share of freelancers (many of whom are bitcoin earners) live in the developing world, and the current KYC policies that traditional banks enforce really do not apply to them — it is unrealistic to understand the financial reality of emerging economies from an office in Basel, where the know-your-customer standards are issued.
International commerce runs a large deficit of trust. Merchants are wary of prospect customers, buyers have no confidence in sellers, and local regulators have no power over foreign merchants. However, demand for new payment methods (including cryptocurrencies) is growing across multiple markets. Figure 2 shows that search engine queries for “where can I spend bitcoins” and “где потратить биткоины” quadrupled from April to May 2017.