The United Nations Center For Trade Facilitation and Electronic Business’s (UN/CEFACT) blockchain project team recently published a ‘Blockchain White Paper’ for public review, describing technical applications for blockchain in supply chains. The paper describes an intent to use blockchain technology to support supply chain interoperability, efficiency, and integrity.
Since the 1980s, UN/CEFACT standards have played a fundamental role in facilitating trade and making economic supply chains more efficient. The Blockchain White Paper analyzes how blockchain technology can be maximized to further the organization’s mission.
It says the UN/CEFACT will focus on a few aspects of blockchain technology including smart contracts, electronic notary and decentralized process coordination. The ability of blockchains to transmit money with cryptocurrency and to facilitate digital voting will not be focused on, since the primary goal of the paper is to see how blockchain could improve supply chains.
The paper states that blockchain could improve supply chains by moving away from traditional paper record systems and replacing it with a digital trustless system. If the UN/CEFACT were to implement blockchain technology, it could standardize supply chain records into one database rather than the many different databases there are today, and the ledger would be immutable, meaning that no one could go in and manipulate the data in order to commit fraud. This would make a blockchain ledger solution for supply chains more reputable and credible than older systems.
The UN/CEFACT says that many different types of supply chain data can be transmitted through a blockchain ledger, including consignment and shipping, invoicing, insurance, and movements through international customs.
On the downside, blockchain doesn’t solve the supply chain interoperability problem, and the UN/CEFACT says it must be careful to choose the right blockchain technology since not all blockchains are created equal. Indeed, some cryptocurrency blockchains have been compromised recently by 51% attacks.
According to the UN/CEFACT Blockchain White Paper, more research and development is needed to ascertain the potential of blockchain to facilitate international trade, and it is suggested that blockchain experts from member nations work together to develop new blockchain technology that could be implemented for supply chains.
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