The United Nations will leverage blockchain technology to boost low-income economies through flexible international trade.
Initiated as a partnership between the United Nations Regional Commissions (UNRCs) and the United Nations Conference on Trade and Development (UNCTAD), the aim is to promote tradethat is inclusive, fair, and good for small businesses, especially in developing countries.
Flexibility and transparency of blockchain
As a malleable technology, blockchain is easy to adopt and implement at cost-effective levels for most people and businesses who understand its value and application. It is decentralized and cannot be easily manipulated by one party. It is also very transparent.
This transparency makes it a fairer platform for saving smart contracts that all parties can verify. It’s cheaper to build and deploy blockchain on a large scale, making it accessible to many locations.
These attributes make it ideal as a tool for exporting, communicating, and learning. In addition, it can help businesses to access capital and ports and track their goods and services.
Clearing the hurdles
The challenge remains the need for more digital and physical infrastructure to boost blockchain development and deployment. Internet connectivity is also a challenge, especially for rural communities.
The United Nations project will invest in critical blockchain infrastructure, focusing on the five countries designated for the three-year phase of the pilot project. These countries include Lebanon, Kenya, Mexico, Mongolia and Uzbekistan.
The cotton sector of Uzbekistan employs about 30 per cent of its workforce and is fertile ground for this pilot to track and trace harvest from farm to market. The benefits and opportunities Uzbek cotton adds to the value chain will also be studied to apply its merits in other sectors.
Encouraging collaboration
Overcoming local, regional, and bloc regulations remains one of the biggest hurdles in international trade. The United Nations White Paperon Blockchain in Trade Facilitation wants to bring divergent views together to cut the red tape around exchanging knowledge, goods, supply chain management, and capital in maritime trade. Transport, healthcare, agriculture, tourism, and the arts all have a stake in it.
Conversations will chart how to manage identity and security issues, intellectual property, and tariffs. It’s a broad association of related fields that must include Artificial Intelligence and the Internet of Things and will require a uniform platform that incorporates existing and future technologies.
Incorporating modern finance
A key industry in this global strategy is fintech companies. They provide the platforms where the exchange of value happens. The challenges here involve regulation, access, and the urgent need to weed out financial crime.
These systems can drastically reduce the cost of sending and receiving money across borders to facilitate trade. Keeping them flexible will encourage adoption. After three years, the United Nations will analyze reports from its five pilot projects and carry the results forward for implementation and further collaboration.
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