Analysts at the Rand Corporation say crypto as part of the bilateral digital trade could lay the groundwork for cryptocurrency adoption in international trade.
Sale Lilly and Scott W. Harold of the American policy think tank Rand Corporation have called on the United States and Japan to include crypto in the bilateral digital trade agreement between both nations.
In an opinion piece published in the Nikkei Asia on Wednesday, Rand Corporation analysts put forward arguments supporting their clamor for crypto to be a part of the digital trade deal.
According to the article, the fact that both nations play host to two of the largest crypto markets in the world makes the exclusion of cryptocurrencies from the trade deal “somewhat surprising.”
The U.S.–Japan Digital Trade Agreement of 2019 does not include crypto or blockchain technology. However, the article stated that some parts of the agreement might cover non-financial aspects of the novel tech.
By excluding crypto and other blockchain-based financial applications, the policy think tank analysts say unnecessary tariffs could burden businesses in the market.
As such, the analysts proposed two possible solutions — negotiating a separate agreement on cryptocurrencies or redefining the terms of the 2019 document to cover virtual currencies and blockchain technology.
By adopting either measure, the analysts stated that such a move could set a precedent for clear-cut adoption of crypto and blockchain in international trade, especially in the digital trading arena. According to U.S. Bureau of Economic Analysis data, America’s digital economy grew to $2.1 trillion in 2019 — almost 10% of the country’s gross domestic product.
The role of crypto, digital currencies, and blockchain technology in international trade is becoming a focal point for industry stakeholders. Back in March, U.S. investment bank Citigroup stated that Bitcoin (BTC) was at a “tipping point” in international trade.
The advent of central bank digital currencies (CBDCs), especially regional CBDCs, is also part of the conversation around virtual currencies in cross-border trade.