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The European Parliament issued a new resolution on “Blockchain: a forward-looking trade policy.” Released on Thursday, the resolution details support for blockchain technology and a digital trade strategy.
The report’s analysis is centered on global trade based on an estimated $18 trillion (16 trillion euro) supply-chain sector. Research shows that the “high transactional costs and burdensome paperwork lead to a complexity of processes and systems susceptible to error.”
Blockchain strategies are able to reduce errors and lower costs by producing verifiable and transparent ledgers that enable parties to track logistics, trace shipments, reduce costs and harvest other key data.
Highlights from the report
Blockchain pilots
Blockchain pilots are proliferating around the world.
“There are at least 202 government blockchain initiatives in 45 countries around the world and economies in regions of Asia-Pacific, the Americas and the Middle East, in particular, are investing in blockchain technologies for trade.”
Supply chain
Businesses can move shipments faster, cheaper and and more efficiently, using blockchain tech, which can also expedite customs.
“[The EU trade policy] considers that blockchain could enable customs authorities to automatically obtain the required information for a customs declaration, reduce the need for manual verification and paper trails, and provide a precise update on the status and characteristics of goods entering the EU to all relevant parties simultaneously, thereby improving track-and-trace capabilities and transparency.”
“Believes that the adoption of blockchain technologies throughout the supply chain can increase the efficiency, speed and volume of global trade by limiting the costs associated with international transactions and assisting business to identify new trading partners, and can lead to increased consumer protection and confidence in digital trade.”
Cross border data flows
Data flows on blockchains are a new paradigm.
“Underlines that blockchain represents a new paradigm of data storage and management that is capable of decentralising forms of human interaction, markets, banking and international trade; emphasises that the rise of blockchain presents both opportunities and challenges in terms of data protection, transparency and financial crime, as the data is immutable once it has been input and is shared with all participating parties, which also ensures its security and integrity; requests that everything possible be done, including at national level, to guarantee the non-falsifiable and immutable character of the technology and to ensure that the fundamental right to data protection is not put at risk.”
“Reiterates its call for provisions allowing for the full functioning of the digital ecosystem and for the promotion of cross-border data flows in free trade agreements.”
Personal data
Future blockchains should protect personal data and make it fully anonymous.
“Underlines that future blockchain applications should implement mechanisms that protect personal data and the privacy of users and ensure that data can be fully anonymous; calls on the Commission and the Member States to fund research, in particular academic research, and innovation on new blockchain technologies that are compatible with the GDPR and based on the principle of data protection by design, such as zk-SNARK (zero-knowledge succinct non-interactive arguments of knowledge).”
Small and medium-sized enterprises (SMEs)
While blockchain can bring economic opportunities to SMEs, the report notes that smart contracts need further development.
“Highlights the benefits blockchain could bring to SMEs by allowing peer-to-peer communication, collaboration tools and secure payments, increasing the ease of doing business and reducing the risk of non-payment and legal procedure costs of contract fulfilment through the use of smart contracts; recognises the need to ensure that the development of blockchain in international trade includes SMEs; highlights that, at the moment, smart contracts may not be sufficiently mature to be considered legally enforceable within any sectoral regulation and further assessment of risks is needed.”
Conclusion
While addressing key concerns such as anti-money laundering, tax evasion, data protection and organized crime, the EU can position itself as a leader in blockchain and international trade.
“Reminds the Commission that the EU has an opportunity to become a leading actor in the field of blockchain and international trade, and that it should be an influential actor in shaping its development globally, together with international partners.”
You can check out the full report here.