Trust in an international system is necessary to maintain functional interactions and trade. A recent World Trade Organization report on blockchain has determined its capability to provide transparency and tamper-proof solutions to international trade.
The report, titled “Can Blockchain Revolutionize International Trade?” assesses the value added to global trade systems by blockchain to surpass $3 trillion dollars by 2030.
Blockchain should facilitate the process of implementation by allowing intellectual property rights and government procedures to be streamlined.
Many actors are involved in international trade from production to consumption. This requires immense amounts of paperwork to create transparency and traceability.
“Blockchain could enhance the transparency and traceability of supply chains, accelerate the digitalization of trade transactions and automate processes,” said WTO Director-General Roberto Azevêdo. “It could give rise to a new generation of services, particularly in areas like transportation and logistics, financial services and insurance.”
Determining the origin, authenticity, and conditions of shipments will be much simpler with blockchain implemented, the report determined.
This could allow openings in the space of smaller and medium sized businesses.
Although the possibilities are immense, “Blockchains are highly resilient compared to traditional databases due to their decentralized and distributed nature and the use of cryptographic techniques, they are not completely immune from traditional security challenges,” according to the report.
Many of the common aspects and concerns with blockchain were included in the discussion such as: interoperability, decentralization vs. private, and scaling.
For blockchain to work well, legal issues must be cleared in many jurisdictions, but if this should happen “Blockchain could make international trade smarter, but smart trade requires smart standardization — and smart standardization can only happen through cooperation. If we succeed in creating an ecosystem conducive to the wider development of blockchain, international trade could well look radically different in ten to 15 years.”
Maintaining security and efficiency are important factors to whether the use of a blockchain is truly a wise decision for this industry.