How Tokenization Innovation Is Influencing Global Trade Infrastructure

Despite widespread innovation, global trade is still heavily reliant on letters of credit, bills of lading, and other paper-based verification processes. Though wire transfers are a step in the right direction, tokenization may serve as the basis for new financial infrastructure. By replacing slow workflows with secure, interoperable, and automated digital equivalents, tokenized solutions are positioned to create change.

The Strangle of Global Trade

Tokenization has grown significantly over the past few years, but its expansion only addresses a small part of a larger problem. The global shortfall in trade finance supply currently sits at around $2.5 trillion. This gap could be due to infrastructure issues, including slow document processing, repeated checks, and fragmented verification cycles, which prevent businesses from accessing timely trade finance.

Verification processes that were created decades ago, based on paper, introduce opaque workflows that increase costs while settlements take weeks. Additionally, banks with major banking financial frameworks under Basel III no longer engage in small trades at the expense of high costs of processing and lower returns.

For instance, when a Vietnamese exporter exports goods to a customer in Germany, the paperwork involved in the transactions, such as invoices, shipping slips, insurance policies, and so on, circulates through several channels. Each of these intermediaries imposes its own KYC and risk verification, slackening trade and endangering the sustainability of whole industries.

The Convergence

In and around 2024 and 2025, asset tokenization moved from an experimental pilot to a legitimate tool for enterprises and institutions. This change was largely driven by the regulatory clarity it could provide, as well as economic incentives. The most potent benefit of the tokenization process, however, might be its ability to encode documentation.

Today, enterprises and institutions are no longer simply experimenting with these solutions. Instead of treating blockchain as an experimental tool, they are integrating tokenized document systems to help improve auditability, automate verification steps, and reduce reconciliation delays. These efforts reflect a shift toward using tokenization as an infrastructure layer that supports processes without altering existing financial structures.

Notably, there is a changed regulatory environment as well. The MiCA framework by the EU provides a clear legal direction for digital assets. Similarly, in the U.S., recent policy changes have reduced the barrier to the adoption of tokenized assets.

Multiple Approaches, Single Direction

The race to tokenize trade finance has produced several competing architectures, each with distinct strategic advantages:

Trade Finance Solutions: These are trade-specific networks that are dedicated to trade documentation and financing. Specialized platforms like XDC Network are an example of this approach, focusing on ISO 20022 compatibility—the same standard used by SWIFT and central banks. This interoperability allows integration with existing banking infrastructure without requiring wholesale system replacement.

Cross-border Payments: Another approach comes from services that have allowed large institutions to cut the days of transactions to minutes. Industry experts have pointed out that financial institutions are testing blockchain-powered payment rails to improve speed and transparency in cross-border transfers, reflecting ongoing innovation within global payment infrastructure.

Enterprise Focus: Industry reports indicate that enterprise blockchain platforms are being used for asset management and high-volume settlement across institutional networks, which are usually used by regulated financial institutions, underscoring how these systems are being evaluated for reliability and operational fit.

Learning From High-Profile Failures

Despite these advances, blockchain trade finance has to be cautious due to recent history. The TradeLens platform of IBM and Maersk was shut down in November 2022 due to a lack of commercial viability to continue its operation. Similarly, in early 2023, Marco Polo Network, backed by over thirty banks such as HSBC and Commerzbank, was insolvent, owing debts of €5.2 million.

These failures reveal a crucial insight: it was not the technology; it was the commercial model and the lack of corporate adoption that caused it, as industry insiders saw it. This is not to say that blockchain cannot be used in trade finance. Instead, it is the fact that technology is not enough. The solutions need to blend with existing systems, fix immediate pain points, and achieve industry coordination, which can be the most challenging endeavor.

Strategic Implications: Integration Over Disruption

The best examples of tokenization initiatives have several similar features: they operate in established regulatory and operating environments and do not require a complete system overhaul.

Some networks in the sector have formed partnerships with infrastructure providers, market-access institutions, and regulated custodians to support interoperability. These collaborations demonstrate how new technologies can complement rather than replace existing systems. The network also addresses the specific pain points of high-frequency trade documentation, offering high transaction throughput and low costs, without requiring companies to abandon their existing ERP systems.

Some payment-technology companies have focused on collaborating with existing financial institutions, an approach that reflects an emphasis on complementing rather than replacing established systems. These partnerships are designed to use blockchain to perform last-mile delivery in areas with low banking infrastructures, supporting the idea that blockchain can be used to supplement existing finance, and not to replace it.

What Remains Uncertain

Despite the institutional momentum, there exist serious questions:

Regulatory Evolution: Although the EU has offered certain certainty with MiCA, the U.S. regulatory structures are still subject to change.

Interoperability: There is a risk of fragmentation by a number of competing platforms. In the absence of standardized principles, companies will have an additional level of complexity instead of simplification.

Adoption Timelines: Corporate uptake has lagged behind technological capability. Replacing deep-rooted business processes cannot be achieved only through superior technology but also through strong economic incentives and synchronization on a global level across the industry.

Technical Risks: Blockchain security has become significantly better, but smart contract vulnerabilities, or bridge exploits, are still a cause for concern. Enterprise adoption requires not just functionality but absolute reliability.

The Path Forward

The tokenization of global trade is no longer far-fetched; already, institutions are developing regulatory frameworks to enable this transformation. For platforms aiming to take advantage of this opportunity, the most successful approach appears to be a focus on integration over disruption, compatible systems that work within the rules. With this in mind, it is possible to build a new financial infrastructure.