UN Trade Body examines Blockchain Technology to See if it Offers Benefits
A United Nation’s body that expedites global trade is studying blockchain technology and smart contracts to see if they can play a role in its mission.
The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) has just issued a white paper now available for public review that examines the nascent technology to see if it offers benefits that could influence its work or that of businesses and organizations.
With developing standards for trade facilitation and supply chain automation now a core part of its remit, UN/CEFACT focuses on “smart contracts, electronic notary, and decentralized process coordination.” feature of the blockchain, rather than its role in powering digital currencies. It further eyes the tech as a possible means to also moves away from traditional paper-based processes and to remove the needs for trust in systems such as those used to manage supply chains.
In the supply chain industry, some types of data can be adequately transmitted over blockchains, as per the paper, including insurance, invoicing, consignment and shipping, and bills of lading. It adds the distributed ledgers run by regulators could further store permits and declarations.
While the organization can see “clear value and use cases” for blockchain technology, it examines issues too.
The paper states:
“Blockchain technology does not solve the interoperability issue that UN/CEFACT standards have always supported. Also, different blockchains are far from equal in terms of the level of trust that participants should place in them.”
Thought, the paper’s authors further sees a potential for the organization to help explain this potential deluge of data, stating that there is “an opportunity for UN/CEFACT to leverage its existing semantic standards.” While blockchain, and other technologies like IoT, can offer to increased supply chain efficiency, the paper recommends that more work is required to ascertain their potential in facilitating trade mechanisms thoroughly.
As per the author, “It could be very useful to create a conceptual model of the international supply chain that explains the role of each technology within the broader map of stakeholders, services, and standards.”
Besides, the paper identifies the gap that the agency is “uniquely positioned to fill.”
The author goes ahead to propose that UN/CEFACT work with national delegations and experts and form working groups to create new technical specifications around the technology.