KEY TAKEAWAYS
- IOTA partners with Salus to address the $2.5 trillion global trade finance gap by building digital infrastructure for trade and finance.
- Salus leverages IOTA’s technology to enhance transparency and efficiency in the critical minerals supply chain, utilizing real-time tracking and verification.
- Key trade documents are tokenized as NFTs on the IOTA ledger, facilitating seamless document flows and reducing transaction delays and costs.
- The integration of IOTA Smart Contracts automates trade finance processes, enhancing security and efficiency in cross-border transactions.
IOTA is taking significant steps to address the global trade finance gap, estimated at over $2.5 trillion, by building digital infrastructure for trade and finance. The partnership with Salus, a platform focused on the critical minerals industry, exemplifies this effort. Salus leverages IOTA’s technology to bring transparency and efficiency to mineral supply chains, replacing outdated systems with secure digital solutions.
Global trade processes often rely on paperwork, siloed databases, and slow verification methods, which create inefficiencies and risks. These outdated systems contribute to the trade finance gap, where businesses struggle to secure necessary funding for cross-border transactions. IOTA’s open-source, digital public infrastructure aims to replace these workflows with real-time, immutable data, enhancing supply chain traceability and trade finance.
Salus: Transforming Critical Mineral Trade
Salus, integrated with IOTA and its TWIN trade data infrastructure, focuses on the critical minerals sector, which includes resources like copper and lithium. The demand for these minerals is rising due to advancements in AI and the green energy transition. However, the trade of these minerals is hindered by slow payment processes and trust issues.
Salus addresses these challenges by providing real-time tracking and verification of shipments, transforming fragmented data into clear digital assets. This approach opens access to new capital sources, such as decentralized finance (DeFi) funds and stablecoin pools, bringing transparency and liquidity to the industry.
Innovative Use of Digital Identity and Tokenization
Salus utilizes IOTA’s infrastructure to manage digital identities and credentials across the supply chain. This includes suppliers, buyers, and transporters, ensuring compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. The use of decentralized identifiers (DIDs) and verifiable credentials allows for secure, global identity management without central authority reliance.
Key trade documents, such as warehouse receipts and bills of lading, are tokenized and issued as non-fungible tokens (NFTs) on the IOTA ledger. This tokenization aligns with international digital trade standards and facilitates seamless document flows across jurisdictions. It also enables decentralized applications to process payments on-chain, reducing delays and costs.
Building a Trustworthy Trade Finance Ecosystem
Salus employs IOTA Smart Contracts to automate trade finance processes, such as transferring titles and executing payments, based on real-world inputs. This automation is crucial for environments where verifying claims about container content or origin is essential for securing financing and managing risk.
The integration of an IOTA Gas Station within TWIN nodes further simplifies user experience by covering transaction fees on behalf of users. This feature lowers barriers to entry for smaller players unfamiliar with Web3, ensuring a seamless experience.
The collaboration between Salus, TWIN, and IOTA showcases how Web3 infrastructure can address real-world trade challenges. By integrating decentralized identity, tokenization, and smart contracts, Salus aims to revolutionize the trade finance ecosystem, contributing to closing the $2.5 trillion gap.
For more information, read the official press release here.
Why This Matters: Impact, Industry Trends & Expert Insights
IOTA’s collaboration with Salus aims to address the $2.5 trillion trade finance gap by leveraging tokenization and digital identity technologies to enhance transparency and efficiency in the critical minerals sector.
A recent Zoniqx report highlights the significant institutional adoption and technological integration driving the growth of tokenization in trade finance. This aligns with IOTA and Salus’s efforts to tokenize trade documents and processes, contributing to closing the trade finance gap.
A Holland & Knight report underscores blockchain’s role in reducing the trade finance gap by enhancing transparency and efficiency. This supports the impact of IOTA’s blockchain technology in transforming trade finance processes and facilitating access to new capital sources.
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