IBM analyzes blockchain usage in global markets

The advantages of blockchain technology in global markets can only be assessed with reliable data exchange. This is stated in a new report by the IBM Institute for Business Value (IBV).

Advancing Global Trade With Blockchain by ForkLog on Scribd

Pilot blockchain trials are driven by a desire among companies to cut costs and risks, as well as to create new business models.

Companies are working on improving business processes together with partners and even competitors. They recognise that blockchain provides a certain level of trust among market participants and regarding their shared data, for example when filing customs documents, cross-border payments, or service contracts.

Organizations are interested in reliable data exchange across interlinked networks on digital markets. For data sovereignty, companies should navigate a stricter regulatory environment for digital trade, including the EU General Data Protection Regulation (GDPR).

“Thanks to network verification and heightened data security, blockchain can help maintain the integrity of data sources while protecting data privacy,” IBV notes.

Industries and governments are continually seeking ways to optimize the movement of goods, data and currencies along global supply chains. For example, the International Chamber of Commerce (ICC) initiative to develop standards for digital trade (DSI) aims to ensure technical interoperability among different blockchain platforms.

“ICC has long collaborated with government, business and broader stakeholder groups to promote open cross-border trade. Digitization is the top global priority, especially after the crisis triggered by COVID-19,” said ICC Secretary General Chris Southworth.

Tariffs and quotas remain the main economic barriers to trade. Therefore, companies are interested in blockchain as a tool to reduce costs. According to the World Trade Organization (WTO), new technologies will help lower trade costs, resulting in world trade potentially rising by 34% in 15 years.

The Trade Facilitation Agreement (TFA) of 2017, signed by more than 160 WTO member countries, projects significant cost reductions by eliminating invisible barriers in trade, such as documentation, procedures and administrative formalities.

“Even in the COVID-19 era, organizations investing in global trade or interested in it will continue to strive to optimize their digital transformation efforts. They will assess shifts in priorities and market conditions and adjust their blockchain initiatives accordingly,” IBV analysts conclude.

The survey was conducted in late 2019 among more than a thousand executives from 22 industries across 34 countries.

Earlier, analytics firm Mindsmith, with the support of international law firm Clifford Chance, identified the main trends of the blockchain industry in 2020.

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