The World Economic Forum (WEF) on Thursday published a report on the role of technology in trade and supply chain where it acknowledged the impact of blockchain and other Distributed Ledger Technologies.
The report titled ‘Trade Tech – A New Age for Trade and Supply Chain Finance’ was prepared in partnership with Bain & Company. The study was a joint initiative of the System Initiative on Shaping the Future of International Trade and Investment as well as the Supply Chain and Transport industries as joint.
Benefits of Blockchain to Global Trade
According to WEF, blockchain and DLT solutions will remove some current barriers to global trade paving the way for more of such trades.
The report reads:
“Distributed ledger and other technological innovations promise groundbreaking advances in trade and supply chain finance by reducing costs and ease of use.”
“[Approximately] 30% or $1.1 trillion of new trade volume will result due to DLT removing barriers,” they say, adding that “[approximately] 40% or $0.9 trillion of traditional will move to DLT for better service levels and lower fees.”
DLTs are known to increase efficiency and speed around supply chain points making cross-border trades easier.
Governments Should Embrace Blockchain Sooner than Later
As part of the whitepaper, WEF argued that national and regional government have no better alternative than to adopt blockchain and set enabling policies to benefit from the technology.
According to the report “They [Governments] should include distributed ledger technology as part of any relevant, forward-looking regulatory considerations, such as cross-border food imports.”
“With some governments already starting to make these moves, the laggards will become increasingly disadvantaged,” the WEF warned.