Bridging The $5 Trillion Trade Finance Gap: $FXD Stablecoin Debuts On Bitrue

© Reuters. Bridging The $5 Trillion Trade Finance Gap: $FXD Stablecoin Debuts On Bitrue

Benzinga - Bridging the $5 Trillion Trade Finance Gap with Overcollateralized Stability.

In an effort to address the growing $5 trillion trade finance gap and prevent disruption to global supply chains, the stablecoin $FXD has emerged as a promising solution. With its soft peg to the US dollar and over-collateralization using the native coin $XDC of the XDC Network (formerly XinFin) layer1 blockchain network, $FXD aims to revolutionize trade finance and facilitate essential transactions. Coinmarketcap, the renowned cryptocurrency tracking platform, has recently listed $FXD following its integration with the Bitrue exchange.

The trade finance gap, which exceeds $5 trillion, primarily affects small and medium-sized enterprises (MSMEs), hindering their ability to access short-term lending necessary for shipping daily essentials. This shortfall can impact everything from the price of a cup of coffee to the availability of vital components in the automotive industry. The widening of this gap each year poses a catastrophic risk and threatens the stability of supply chains that ensure the timely delivery of daily consumables to households worldwide.

$FXD acts as a settlement layer for tokenized real-world assets, particularly trade finance assets, on the XDC network. By being overcollateralized with $XDC, the stablecoin aims to provide essential services such as deferred payments and buy now, pay later solutions, catering to the vast $30 trillion global trade finance industry.

Coinmarketcap's decision to track $FXD further solidifies its presence and significance within the cryptocurrency market. Interested users can find detailed information and statistics about $FXD's performance and market cap on Coinmarketcap's dedicated page.

Bitrue, a prominent cryptocurrency exchange, has played a crucial role in enabling the listing of $FXD. By partnering with Bitrue, $FXD gains access to a wider audience, increasing its liquidity and potential for adoption. Users can now trade $FXD against USDT on Bitrue's trading platform, contributing to the stability and growth of this groundbreaking stablecoin.

It's worth noting that minting $FXD is exclusively possible through the over-collateralization of $XDC on the fathom.fi real-world finance DAO protocol. This unique process ensures the stability and reliability of $FXD as it is directly linked to the underlying collateral.

One of the primary use cases for $FXD is its role as a settlement layer for peer-to-peer protocols utilized by regulated trade finance originators. These originators leverage the capabilities of $FXD to streamline their operations and enhance efficiency in the trade finance ecosystem. To facilitate these interactions, the TradeFinex portal serves as a dedicated platform for regulated trade finance originators.

Additionally, Fathom - The real-world finance DAO protocol behind the creation of $FXD, extends an invitation to trade finance players to embark on pilot programs. By partnering with industry participants, Fathom aims to showcase the potential of $FXD in addressing the trade finance gap and revolutionizing the way trade finance operations are conducted. These pilot programs offer an opportunity for trade finance players to explore the benefits and functionalities of $FXD within their specific contexts, ultimately paving the way for broader adoption and the transformation of the trade finance landscape. Interested parties can collaborate with Fathom to initiate pilot programs and unlock the full potential of $FXD in revolutionizing trade finance practices.

Let’s quickly understand how to mint FXD by keeping XDC in an escrow contract.

~Deposit XDC: The user needs to create Collateralized Debt Positions (CDP) for FXD Stablecoin using their XDC by depositing coins into FXD smart contracts.

~Borrow FXD: Users can borrow FXD Stablecoin using their collateralized XDC at Fathom’s Dapp. This will effectively "collateralize" their XDC, which means that the user has used their deposited XDC to guarantee the value of the FXD Stablecoin they receive. The maximum amount of FXD Stablecoin available to borrow is determined by the collateralization ratio - 75% of collateral value. Recommendations to mint only 50% or less to avoid any liquidation incase of blank swan event.

Steps: Connect Wallet -> Open Position -> Enter amount of Collateral XDC -> Click on Open this position -> Approve Position.

~Use FXD: The user can use FXD stablecoin in various DeFi activities or trade it on Fathom DEX.

~Repay FXD: If the user wants to return his collateral, he must repay the borrowed FXD Stablecoin. The user must repay the borrowed amount and the interest in FXD Stablecoin. Steps: Manage Position -> Repay Position -> Enter amount of FXD -> Click on Repay this Position.

~Uncollateralize XDC: The user can uncollateralize their position and receive back their XDC coins collateral.

By following these steps, users can easily mint FXD Stablecoin by depositing XDC into the escrow contract and benefit from the various opportunities offered by the Fathom ecosystem.

In conclusion, $FXD emerges as a groundbreaking stablecoin that aims to bridge the ever-widening trade finance gap and mitigate risks associated with disrupted supply chains. With its unique over-collateralization mechanism and integration with the XDC blockchain network, $FXD paves the way for innovative trade finance solutions, enabling seamless transactions and supporting global economic growth.

This post was authored by an external contributor and does not represent Benzinga's opinions and has not been edited for content. This contains sponsored content and is for informational purposes only and not intended to be investing advice. Cryptocurrency is a volatile market; do your independent research and only invest what you can afford to lose. New token launches and small market capitalization coins are inherently more risky than large cap cryptocurrencies. These tokens are subject to larger liquidity and market risks.

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