UK’s Revolutionary Leap: Blockchain Technology to Power Digital Trade Documents

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In a groundbreaking move, the UK government announced that it could leverage blockchain technology to digitize trade documents, a step that could revolutionize the way global trade operates. This comes as part of the Electronic Trade Documents Act 2023, which officially became law on July 20 and is set to take effect this autumn.

The Act, which is technology-neutral, paves the way for the use of blockchain technology if it meets the reliability test. This could potentially reverse centuries-old merchant laws, allowing trade documents to be stored and distributed digitally. The Law Commission for England and Wales, the independent statutory body that drafted the bill, estimates that billions of papers are passed around annually with global shipments, a practice that could be significantly reduced with this new law.

The Act’s significance lies in its potential to treat electronic documents as legally analogous to paper if they meet certain criteria. Law Commissioner Sarah Green stated that blockchain technology happens to be one of the means by which such documents can meet those criteria.

The government also highlighted that electronic trade documents could increase security and compliance by making it easier to trace records, particularly through the use of blockchain and distributed ledger technology.

The Move Is Considered a Step Forward for the UK

James Butterfill, head of research at CoinShares, hailed this as a “step forward” for the UK. He emphasized that using blockchain technology to distribute trade documents digitally could improve workflow and efficiency. In the long run, this could reduce costs and ensure compliance.

This move by the UK government is a testament to the growing recognition of blockchain technology’s potential to transform various sectors, including global trade. It sets a precedent for other countries to follow suit, potentially leading to a more efficient, secure, and cost-effective global trade ecosystem.