Blockchain & DLT in Trade: Where Do We Stand?
The world of digitalization is evolving at rapid speed. That is self-evident when reading an excellent whitepaper “Blockchain & DLT in Trade: Where We Stand?” from Deepesh Patel, Editorial Director at Trade Finance Global (TFG), and Emmanuelle Ganne, Senior Analyst at the World Trade Organization (WTO), which has been released today at the Hong Kong Fintech Festival. We are enormously proud that projects with several Fintechs and communities, where we at our Fintech ecosystem have worked hard with, have been included in the whitepaper showing numerous initiatives around trade finance. Thus, we are delighted to share with you the final whitepaper, “Blockchain for Trade: where do we stand?
The message of this whitepaper is basically that in every crisis lies opportunity! This is particularly true with trade digitalization projects leveraging distributed ledger technology (DLT) – commonly referred to as
Blockchain. International trade is often hindered by having one part of the transaction processed this way, the next in another way, and so on. Going from a silo to another if you will. This serves no-one but increases the risk of fraud, mistakes, manual work, and costs. Streamlining the processes by implementing a tamper-proof, decentralized DLT to break those silos that make international trade such a headache. Most corporates surveyed have experienced a positive benefit to their DLT plans and activities as a result of the pandemic.
Of course, “the promising potential of DLT to facilitate international trade, from customs procedures to trade finance, will only be realized if regulation evolves to support the large-scale deployment of the
technology and if a globally harmonized, digitized trade environment are put in place. This will require a global dialogue; a dialogue that involves all stakeholders, public and private.” This is so true – even the best and most secure inventions to digitalize processes become vain if regulation lags and does not support the progress. Therefore, building a harmonized regulatory framework is an absolute must. “Governmental authorities and policymakers around the world need to begin addressing the historic, and often wildly outdated, laws that are burdening those seeking to guide the industry into the future.”
Distributed ledger technology (DLT) in trade is usually used for two primary purposes: 1) track-and-trace, to
enhance transparency on how goods are being processed and 2) the digitalization of trade processes.
The whitepaper primarily focuses on the digitalization side of DLT in trade, examining how it can be used in pursuit of the digitization of trade documentation, digitalization of trade processes, and the exchange of trade data. “The future of trade digitalization relies on interoperability and the development of end-to-end solutions. A crucial step towards end-to-end trade digitalization is creating an ecosystem that allows for seamless exchanges of data between existing platforms. This requires developing and implementing globally accepted digital standards for trade.”
What one can also find very useful in this whitepaper is a list of companies within each “block” of the “chain”, the phase their solution is, how they have evolved from 2019 to 2020, and a short description of each company.
Very useful is also, that white paper maps 44 projects related to #tradefinance, #insurance , #KYC #shipping #logistics and #supplychain , digitization of trade documents and digitalization of trade processes, as well as other projects such as marketplaces. The study highlights the stage of development of the various projects and their underlying technology. Nineteen standardization initiatives that work towards creating the standardized framework the industry craves have also been added to the study.
The most impressive and promising work is in progress within ITFA and DLT initiative and the fintechs around the initiative, from where the whole value chain; the corporate customers can eventually gain with streamlined liquidity management, increased risk management, and almost endless cost-cutting opportunities.
#tradefinance #insurance #KYC #shipping #logistics #supplychain #banking #fintech #financialservices #documentation #enigio #marcopolo #bolero #wetrade #itfa #contour #essdocs
