Yiwu stablecoin cross-border payment practice: a sample of the integration of small commodity trade and blockchain technology

In Yiwu, China, the world's largest small commodity distribution center, stablecoins are penetrating into the cross-border trade payment system at an astonishing scale. According to data from blockchain analysis company Chainalysis, the scale of stablecoins on the Yiwu market chain has exceeded 10 billion US dollars in 2023. This figure not only reflects the high-frequency and fragmented payment needs of small commodity trade, but also reveals the potential of blockchain technology in traditional trade scenarios.

1. Why has stablecoin become a "rigid need" for cross-border payments in Yiwu?

Exchange rate risk hedging and cost optimization

Yiwu's small commodity trade is mainly small and medium-sized batch orders, and the amount of a single transaction is usually between thousands and tens of thousands of US dollars. Traditional cross-border wire transfers require a handling fee of 1%-3% and a receipt cycle of 2-5 working days, and exchange rate fluctuations may swallow up meager profits. Stablecoins (such as USDT, USDC, etc.) rely on the real-time settlement characteristics of blockchain to reduce the cost of a single payment to less than 0.1%. At the same time, they avoid exchange rate risks by anchoring the price stability of legal currency, which is in line with the trading habits of small and medium-sized merchants to "ship upon payment".

The settlement efficiency revolution of fragmented trade

The Yiwu market processes more than 200,000 cross-border orders per day. Some merchants access stablecoin payment channels through third-party payment platforms to achieve a closed loop of "payment upon order placement and shipment upon receipt". For example, a jewelry exporter receives USDT payments from Southeast Asian buyers through a Hong Kong compliant digital asset platform. The funds can be directly used to purchase raw materials or exchange for RMB, which is 3-7 days shorter than the traditional wire transfer process.

The implicit empowerment of supply chain finance

The on-chain traceability of stablecoins provides a new type of credit endorsement for small and medium-sized merchants. Some cross-border payment platforms provide merchants with credit lines based on transaction flows. For example, a stablecoin payment service provider cooperates with a local bank in Yiwu to approve a trade financing line of up to RMB 500,000 for merchants based on on-chain transaction data, alleviating the pain points of "light assets and difficult financing" in traditional trade.

The "digital payment revolution" behind small commodities

From exchanging chicken feathers for sugar to the flow of tens of billions of dollars on the chain, Yiwu's changes reflect the resilience of the integration of China's real economy and digital technology. When stablecoins become the "digital link" connecting 2.1 million small commodities around the world, its significance has surpassed the payment tool itself - it not only reconstructs the settlement logic of cross-border trade, but also indicates that a new digital economy ecosystem based on blockchain and supported by real scenarios is taking shape.