"By cryptographically locking an exchange rate forward-contracts into a decentralized, blockchain-based escrow structure could protect an exporter and an importer from currency volatility over the timeframe of their trade deal without either party having to trust the other, or anyone else, to hold the funds. Voilà, no need for the dollar to sit in the middle.

Under this system, a Brazilian farmer could agree to provide a Chinese hoggery with soymeal feed for its pigs at a real-to-renminbi exchange rate fixed at signing, knowing that a smart contract would automatically deliver those funds upon arrival of the shipment in Shanghai. With the right oracles in place, all this would happen peer-to-peer without either side having to trust the other’s promise to deliver the funds or the goods.

As such, they could eschew the grossly inefficient current system in which a U.S.-regulated correspondent bank typically acts as the trusted third party in the deal, first exchanging the importer’s renminbi into dollars and then converting them into reals for the Brazilian exporter. If such arrangements proliferated, I have argued, it would reduce global trade-related demand for dollars and, by extension, diminish investment in dollar reserve assets such as U.S. government bonds."

I thought this was a very interesting article, especially this bit here. What do people think?