Some of the industries where blockchain could make operations more efficient include finance, supply chain management, intellectual property, insurance, transportation, logistics and government administration, among others.
The publication estimates that blockchain could significantly reduce a variety of trade costs by increasing transparency and facilitating processes automation and payments, including verification, financial intermediation, exchange rate costs and co-ordination.
“Although it is difficult to assess the extent to which the deployment of blockchain technology will affect trade costs, preliminary indications at hand tend to point to a notable impact. Cost reduction estimates in the financial sector and the shipping industry range from 15 to 30 per cent of total costs. According to the World Economic Forum, the removal of barriers due to blockchain could result in more than $1 trillion of new trade in the next decade,” the report states.
The report also discusses how blockchain can facilitate the administration of intellectual property rights and enhance government procurement processes.
Blockchain can also improve supply chain transparency and open up new trading opportunities for micro, small- and medium-sized firms.
However, the publication also warns that blockchain is not suited to all situations and works best where multiple parties are involved in transactions that require trust and transparency.
Further, the technology is still maturing and various challenges must be addressed before it can be used on a wide scale and have an impact on international trade.
Some of these issues include the ability of the technology to be scaled for large or complex applications, how immune it is to security threats, whether blockchain platforms can be used in an integrated manner as well as the legal issues that need to be ironed out to increase its use.
"Although blockchains are highly resilient compared to traditional databases due to their decentralized and distributed nature and the use of cryptographic techniques, they are not completely immune from traditional security challenges, and advances in technologies, in particular the rise of quantum computing, could, in the long term, represent a threat to blockchain technologies," the report states.
It adds:
"One of the key technical challenges facing Blockchain is the question of interoperability, at the technical level as well as at the level of semantics... Numerous platforms are being developed that use different technical interfaces and algorithms and that do not 'talk to each other'."
The report calls for a multi-stakeholder dialogue to assess the practical and legal implications of blockchain and to develop collective solutions to challenges while offering flexibility to enable the technology to thrive.
The report concludes:
"Blockchain could make international trade smarter, but smart trade requires smart standardisation — and smart standardisation can only happen through co-operation. If we succeed in creating an ecosystem conducive to the wider development of blockchain, international trade could well look radically different in ten to 15 years.”