Global trade management (GTM) solutions facilitate the timely and compliant movement of goods. GTM is comprised of equal parts risk management and trade optimization and helps increase financial and supply chain efficiencies. To achieve better “global trade visibility” and more efficient and secure methods for global trade processes, Blockchain technology is being applied.
A Blockchain is an append-only distributed digital ledger. Secure by design, a Blockchain is making it profoundly suitable for the recording of GTM events and processing of transactions that involve multiple participants, some of whom cannot be fully verified.
Businesses use digital smart contracts (a Blockchain-based contract that holds both parties accountable by only completing the terms of the agreement once both parties have fulfilled their end of the bargain) to eliminate third-party involvement, abolish paper contracts, and speed up settlement of transactions.
The roadblocks are rooted in the complexity and the sheer volume of governmental, industry, and trade-related rules and regulations. The analysis and calculations required to comply demand significant time and resources, making the node prohibitively expensive.
An integrated hierarchical GTM Blockchain system powered by a complete suite of GTM applications and multinational content assimilates Blockchain and off-chain functions within the unified business model. Each satellite childchain performs specifically designated functions and is allowed off-chain transactions. The resolved smart contracts then flow into the main GTM Blockchain.
This limits distribution of data to the decision-involved parties and for the visualization of supply chain processes. Calculations, verifications, and error corrections are confined to the remote nodes, which would not consume resources of the main Blockchain.
The extensive acceptance of blockchain in international trade will help in decreasing the friction in the international economy. It is expected to benefit specifically the importers and exporters, as it will grant them access to the financial support in areas where the current financial arrangement is lacking.