UN/CEFACT Assesses the Applicability of Blockchain in the Supply Chain
Seemingly, the ongoing blockchain revolution has finally caught up with the United Nations. As of now, the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT), an agency charged with overseeing international trade, is evaluating the applicability of distributed ledger technology and smart contacts to its cause. In this regard, the UN agency recently put out a whitepaper that has an in-depth analysis of the new blockchain technology, along with its potential influences to enterprises and other institutions.
Typically, the primary role of UN/CEFACT is to establish protocols that streamline the global trade industry and thus ensure smooth operability of the supply chain. Concerning blockchain technology, this trading agency will exclusively focus on its decentralization capabilities, smart contracts, and its inalterability. Notably, UN/CEFACT will ignore the application of distributed ledger technology as the underlying driver of digital currencies. Furthermore, the UN body views blockchain as a suitable and dependable alternative to the present systems, which are often characterized by voluminous paperwork. The adoption of this nascent tech is expected to reinstate trust as well as increase the efficiency and affordability of transactions.
The UN/CEFACT whitepaper denotes the applicability of blockchain technology in multiple use cases such as clearing and forwarding of shipments, the insurance sector, invoicing, and so on. Moreover, regulated blockchain ledgers can store declarations and license incontrovertibly. Contrariwise, the whitepaper also highlights the shortcomings of distributed ledger technology, including the inability to solve the recurrent interoperability menace. Also, the levels of trustworthiness vary substantially between different blockchains.
According to the whitepaper, the UN global trading watchdog can apply its current standards to mitigate the potential overflow of data as a result of adopting blockchain technology. Explicitly, the document acknowledges the efficiency resulting from the implementation of IoT and distributed ledger technologies, but further states that additional tests are needed before the two are fully integrated into the trading sector. Regarding this, the paper proposes the development of a prototype of the global supply chain that shows the role of each technology and how it affects service delivery, protocols and other stakeholders. Additionally, UN/CEFACT will team up with experts from different countries to create groups that facilitate the quick adoption of blockchain technology.
The acceptance of blockchain technology by a prominent international agency such as the United Nations is a significant pointer that distributed ledgers are inevitable. Soon enough, additional facets of the global economy will embrace this technology as an integral part of their operations. This is particularly understandable since it has numerous benefits as well as an enormous potential. Undoubtedly, blockchain technology will eventually take over, given that it already has countless real-life use cases while being in its developmental stages.