Can Blockchain Technology Facilitate International Trade?
23 Pages Posted: 25 Apr 2019 Last revised: 1 May 2019
Date Written: April 24, 2019
This study considers the potential role for blockchain technologies in international trade, specifically how such technologies might affect trade finance, customs procedures, and provenance (origin) of goods. For trade finance, blockchain could reduce the expense and time required to facilitate trade that depends on third-party lending or insurance. For customs procedures, blockchain could reduce costs, expedite customs procedures, and boost both global trade volumes and economic output more than the worldwide elimination of tariffs. For provenance, blockchain could improve management of supply chains by providing real-time information on the origin and movement of goods. Blockchain may also be used to improve detection of illicit trade flows and deter illegitimate efforts to circumvent trade rules. Such applications could aid customs and law enforcement in facilitating the flow of legitimate trade. Numerous efforts are underway to explore the benefits of blockchain as well as how to mitigate its risks for international commerce.
Keywords: blockchain technology, trade, transparency, provenance, trade financing, trade facilitation, supply chains, SMEs, customs procedures
JEL Classification: F1
Suggested Citation: Suggested Citation