Can Blockchain revolutionise trade?
Trade has always been shaped by technological innovation. In recent times, a new technology, Blockchain, has been greeted by many as the next big game-changer. Can Blockchain revolutionize international trade?
The publication introduces the technology with a basic explanation of how, as a tamper-proof, decentralized record of transactions, it allows participants to collaborate and build trust with each other. It describes different classifications of Blockchains and their current and possible applications in the various areas covered by WTO rules. In doing so, it provides an insight into the extent to which this technology could help with trade facilitation, including how it can hasten the transition to paperless trade transactions. It considers Blockchain's potential and limits in transforming services by looking at payment systems, insurance and the automation of contracts. The publication also discusses how Blockchain could help ease the administration of intellectual property rights and enhance government procurement processes.
Other potential benefits identified by the publication include cross-cutting opportunities to reduce trade costs, enhance supply chain transparency and open up new trading opportunities for micro, small and medium-sized enterprises.
The publication reviews various challenges that must be addressed before the technology can be used on a wide scale and have a significant impact on international trade. These include issues such as whether the technology can be scaled up for large or complex applications, how immune it is to security threats, to what extent various Blockchain platforms can be used in an integrated manner, and which legal issues need to be ironed out to increase mainstream use of the technology. The publication calls for a multi-stakeholder dialogue to assess the practical and legal implications of the technology and to develop collective solutions to existing challenges while providing the flexibility for the technology to thrive.