A United Nations body that facilitates global trade is examining blockchain and smart contracts to see if they could play a role in its mission.
To that end, the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) has just published a white paper – now available for public review – that studies the nascent technology to see if it offers benefits that could impact its work or that of businesses and organizations.
With developing standards for trade facilitation and supply chain automation already a core part of its remit, UN/CEFACT focuses on the “smart contract, electronic notary and decentralised process coordination” features of blockchain, rather than its role in powering cryptocurrencies.
It further eyes the tech as a possible means to further move away from traditional paper-based processes and also to remove the need for trust in systems such as those used to manage supply chains.
Within the supply chain industry, a number of types of data can be effectively transmitted over blockchains, according to the paper, including insurance, invoicing, consignment and shipping, and bills of lading. It adds that distributed ledgers run by regulators could also store permits and declarations.
While the organization can see “clear value and use cases” for blockchain technology, it sees issues too.
“Blockchain technology does not solve the interoperability problem that UN/CEFACT standards have always supported,” the paper says. “Also, different blockchains are far from equal in terms of the level of trust that participants should place in them.”
Further, blockchain introduces more electronic data that must be shared across supply chain participants. Meanwhile, many streams of data being across blockchains and possibly provided by internet of things devices provide a challenge to decipher.
However, the papers authors also see a potential for the organization to help clarify this potential deluge of data, saying that there is “an opportunity for UN/CEFACT to leverage its existing semantic standards.”
While blockchain, as well as other technologies like IoT, can contribute to increased supply chain efficiency, the paper suggests that more work is needed to fully ascertain their potential in facilitating trade mechanisms.
“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,” according to the authors.
Furthermore, the paper identifies gaps that the agency is “uniquely positioned to fill.”
The authors go on to suggest that UN/CEFACT work with national delegations and experts and form working groups to develop new technical specifications around the technology.
Supply chain image via Shutterstock