WTO Study Reveals that Blockchain Deployment in International Trade Could Reach $3 Trillion by 2030
The World Trade Organization (WTO) has made its observations on the blockchain known in a report it released on November 27. The report, which looks at the effect of blockchain technology on international trade, noted that the “economic value-add” of the technology on a worldwide scale could go up to $3 trillion by 2030.
The report, titled “Blockchain and International Trade: Opportunities, Challenges, and Implications for International Trade Cooperation,” takes an in-depth look at blockchain applications and the issues that must be resolved before it can be deployed in various industries. The report also examined the effect the technology has on customs clearance, trade finance, logistics, and transportation industries.
According to the report, blockchain is capable of cutting trade costs significantly by “increasing transparency and facilitating processes in automation, including financial intermediation, exchange rate costs, coordination, and other aspects.” Also, the study estimates that the next decade could see the addition of over $1 trillion in new trade due to blockchain’s ability to remove barriers.
Furthermore, the report expects blockchain to aid in administering “intellectual property rights across multiple jurisdictions by delivering more transparency and efficiency and enhance government procurement processes, including managing public contracts and fighting fraud.”
In the logistics and transportation sectors, blockchain can be used to enhance and improve supply chains by “allowing for the tracking of shipments and proving their authenticity.” In addition, micro-, small-, and medium-sized companies could take advantage of the new opportunities the technology has to offer.
In spite of this good news, there is some warning. According to the study, challenges such as security issues, energy consumption, and limited scalability of blockchains due to the predetermined size of blocks should first be addressed before the technology is deployed.
Even though “blockchains are highly resilient compared to traditional databases due to their decentralized and distributed nature and the use of cryptographic techniques, they are completely immune from traditional security challenges,” the report reads.
The study also emphasizes the importance of building “a multi-stakeholder approach in order to find appropriate use cases in cross-border trade.” The WTO believes that blockchain technology needs frameworks to ensure that blockchain transactions are spread across jurisdictions and has a clear legal status while also ensuring the interoperability of the networks.
“Blockchain could make international trade smarter, but smart trade requires smart standardization – and smart standardization can only happen through cooperation. If we succeed in creating an ecosystem conducive to the wider development of blockchain, international trade could well look radically different in 10 to 15 years,” the report concludes.
The World Trade Organization has released a study on the effect of blockchain technology on international trade. According to the report, the economic value that blockchain will add on a global scale could reach about $3 trillion by 2030.
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