Decentralized finance (DeFi) has emerged as a promising innovation for trade finance, with its potential to enhance transparency, efficiency, and security. One area of application is the integration of blockchain-based DeFi with letters of credit, which play a crucial role in ensuring payment fulfillment between importers and exporters. This integration can streamline processes, increase security, and reduce costs. Furthermore, DeFi solutions offer opportunities to expand the range of lending volumes and lending tools in trade finance. 
 
Traditional banks have the opportunity to serve as liquidity and risk assessors and as owners of trade finance blockchains, which can catalyze greater customer inclusion, particularly SMEs. To take advantage of these possibilities, a cautious approach to DeFi adoption and risk mitigation is essential.