UN Trade Agency Investigates Blockchain Technology for Supply Chains

Blockchain United Nations Technology Global Trade Supply Chain

A UN agency focusing on global trade and supply chains is examining the role blockchain technology could play in the future of commerce, according to a report published by the body.

The United Nations Centre for Trade Facilitation and Electronic Business has made its white paper available for public consultation, as part of a process scheduled to run until late July.

The study looks into blockchain technology, as well as smart contracts, to establish how they might lead to efficiency gains in supply chains in the near future.

Supply chain automation and standards already form part of the agency’s core remit, and the report explores the “smart contract, electronic notary and decentralized process coordination” aspects of the technology to this end, rather than cryptocurrencies.

In particular, the report examines the potential to move beyond paper-based systems backed by trust, into processes powered by smart contracts and automatic validation to smooth supply chain systems.

Blockchain technology has been suggested as a major development for international trade and logistics, with the ability to handle a number of core processes, including consignment and shipping, invoicing and insurance, as well as handling permits and customs declarations.

However, alongside the potential benefits of blockchain technology, the report also flags several issues with the technology as it stands at present.

“Blockchain technology does not solve the interoperability problem 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.”

While emerging technologies like blockchain and IoT could profoundly improve supply chain management, the report concluded there is still some way to go to establish these benefits in the trade use case.

“It could be very useful to develop a conceptual model of the international supply chain that shows the role of each technology within the broader map of stakeholders, services and standards.”

Nevertheless, the report shows that a significant UN agency is taking blockchain technology seriously, joining countless other government and public authority bodies worldwide in embracing the possibilities afforded by the blockchain.