Welcome to the sixth issue of DNeXPOST!
The application of blockchain technology has profoundly progressed on a larger scale across various industries, unlocking new business opportunities amidst the rapid change in the operating environment.
The COVID-19 pandemic led to several disruptions across global supply chains, mainly affecting cross-border trade and travel. Nevertheless, the health crisis also presented a silver lining for the trading community to accelerate the need for technological innovation thus reduce bureaucratic red tape and facilitate the movement of goods across borders.
Blockchain technology can be a game changer for the cross-border trade industry, presenting an opportunity to improve further efforts at trade digitalisation and support in mitigating the socioeconomic impacts of the health crisis.
Also known as distributed ledger technology, blockchain allows digital information to be recorded and distributed, but not edited. In this way, a blockchain is a foundation for immutable ledgers or records of transactions that cannot be altered, deleted, or destroyed.
The technology provides solutions for trade operations by simplifying cross-border trade, contributing to competitive improvements, and reducing transaction costs. The significance of blockchain applications within foreign trade has increased since the start of the COVID-19 pandemic, and it is expected to play an even more prominent role in the post-pandemic world.
Despite the technological advancement, the progress of blockchain technology adoption is still lagging as certain quarters may find it difficult to apprehend its real benefits and application due to the complexity of its adoption.
There are still many areas of opportunities to improve operational efficiencies in cross border trade including the fact that shipping and trading still heavily rely on human resources and are affected by manual and paper-based processes, which are very costly, slow and error-prone.
Blockchain can enable automated, secure and efficient information sharing to ensure the efficient implementation of Mutual Recognition Arrangements. It also allows participants to digitally connect, share information and collaborate across the shipping supply chain ecosystem.
Businesses and governments can play a pivotal role in building the necessary ecosystem for engaging stakeholders, addressing actual or perceived risks, and ensuring that blockchain can effectively support sustainable and inclusive development.
This is definitely a space where private and public sector can come together to find common goals and work towards achieving them.
Application of blockchain technology in cross border trade is one of key discussions among delegates of the recently held 66th Pan Asian e-Commerce Alliance (“PAA”) Working Group and Steering Committee Meetings recently held in Kuala Lumpur.
Our wholly-owned subsidiary, Dagang Net Technologies Sdn Bhd, hosted the event which was attended physically and virtually by delegates across three continents from 15 members.
Members of PAA meet regularly to discuss matters that promote and provide secure, trusted, reliable and value-adding IT infrastructure and facilities for efficient global trade and logistics.
There are more stories on this as well as other exciting updates from across DNeX Group. As always, we hope you find this issue useful.Sources: Consensys, Inter-American Development Bank, United Nations Conference on Trade and Development, and World Trade Organisation