August 23, 2021 10:56 UTC
August 23, 2021 10:56 UTC
Blockchain technology is considered to be a possible solution to the dollar liquidity problem in emerging markets.
Blockchain fintech company XREX has won a global investor consortium of more than US$17 million in pre-A investment spherical light-emitting diodes, highlighting the increased demand for crypto-focused startups by institutions.
The consortium is promoted by the Taiwan-listed CDIB Capital Group and includes investors from major banks and capital companies in North America, Europe and Asia.
Several alternative listed companies have participated in the investment field with SBI Investment. They may be subsidiaries of SBI Holdings, ThreeD Capital, E.Sun Capital, and Systex Corporation. Black Marble, New Economy Ventures, Metaplanet Holdings, Angel Group, and the National Development Fund of the Taiwan government also participated in this round of financing.
XREX mentioned that these funds will be used to expanding their currency portfolios, obtaining licenses and establishing new partnerships with currency institutions and digital wallet providers. According to reports, the company’s mission is to use blockchain technology to solve the problem of shortage of dollar liquidity in emerging markets.
Although the U.S. dollar’s status as the world’s reserve currency is threatened due to the large-scale intervention of the Federal Reserve system and the de-dollarization efforts of China and Russia, the U.S. dollar is still the most widely used currency in the world. Because the Bank for International Settlements explained in its 2020 U.S. Dollar Financing Report that the U.S. dollar accounts for more than 80% of exchange trading volume. Together, it represents more than an hour of official exchange reserves.
The Covid-19 pandemic has put additional pressure on the liquidity of the U.S. dollar, especially in emerging markets where the U.S. dollar is highly trusted. These liquidity issues have affected world commerce and trade long before the pandemic took root. Example: The 2019 Asian Development Bank Trade Finance Survey found that nearly 30% of respondents believe that USD liquidity is a serious obstacle.
Wayne Huang, co-founder and corporate executive officer of XREX, said: “We are keenly aware of the dilemmas faced by several cross-border merchants who cannot securely access US dollar liquidity.” In response, his company is working with regulators and financial institutions. Cooperatively develop tools to help merchants and small businesses in emerging markets reduce foreign exchange losses and obtain a large number of reliable U.S. dollar channels.