Blockchain and international trade

By: Vajratiya Vajrobol, International Center for AI and Cyber Security Research and Innovations (CCRI), Asia University, Taiwan,

Blockchain technology has become a powerful force in the complex of international trade. It provides creative answers to problems and fundamentally changes the way global business functions. The decentralized and transparent ledger system of blockchain emphasizes in a new era characterized by enhanced efficiency, security, and accountability. This article explores five fundamental ways in which blockchain is transforming international commerce as follow;

1. Clear visibility and capacity to track the flow of information or goods

Blockchain technology provides unprecedented levels of transparency and traceability to global trade. By utilizing a decentralized and tamper-proof ledger, stakeholders are able to have immediate and transparent access to the complete supply chain, guaranteeing an unchangeable record of transactions. This enhanced openness serves as a fundamental basis for ensuring responsibility and confidence, especially in industries where the origin and authenticity of products are of utmost importance [1].

2. Utilizing smart contracts to automate processes

Smart contracts, a defining characteristic of blockchain advancement, introduce a novel age of effectiveness by automating procedures throughout the supply chain. These automated contracts simplify processes like payments and customs clearance, decreasing reliance on middlemen and speeding up the trade cycle. Smart contracts not only automate processes but also enhance efficiency by promoting precision in fulfilling contractual responsibilities [2].

3. Mitigated Fraud and Counterfeiting

The decentralized and secure design of blockchain greatly reduces the dangers of fraud and counterfeiting in international trade. Blockchain guarantees the integrity of the whole trading process by offering an unchangeable and verifiable record of transactions. This not only protects enterprises from fraudulent activity but also strengthens customer trust, especially in industries where product authenticity is crucial [3].

4. Enhanced Funding and Risk Mitigation

The influence of blockchain on global commerce extends to the financial domain, augmenting effectiveness and safety in financing and risk mitigation. Smart contracts and decentralized funding platforms optimize operations, facilitating expedited approvals and minimizing bureaucratic documentation. The openness of blockchain transactions enables financial institutions to evaluate and control risks more efficiently, hence promoting a stronger and more adaptable financial ecosystem for international commerce [4].

5. Efficient Customs Procedures

The impact of blockchain extends beyond customs procedures, providing a safe and transparent platform for handling trade-related documents. By implementing a decentralized ledger that is available to all key stakeholders, such as customs officials, the occurrence of inconsistencies is significantly reduced, and the level of collaboration is greatly improved. The outcome is an optimized customs procedure that not only diminishes wait times but also enhances the overall efficiency and cost-effectiveness of cross-border commerce in the supply chain [5].

Ultimately, in the context of digital transformation, blockchain plays a crucial role in reconfiguring the process by which commodities and services are exchanged across international borders. Blockchain offers transparency, automation, and security, which have the potential to create a global trading ecosystem that is more efficient, reliable, and linked. The influence of blockchain on international trade is significant, including several benefits such as fraud reduction and the simplification of customs procedures. This technology is setting the stage for a future where the intricacies of cross-border transactions are managed effectively.


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Cite As:

Vajrobol V. (2023) Blockchain and international trade, Insights2Techinfo, pp.1

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