The blockchain world has received a massive boost following the initial trial by Australian and Singapore governments over the possibility of using blockchain for cross-border trading. The two countries are looking at the viability of using blockchain technology to transfer and verify trade documents through digital verification systems, hence reducing the cost and time of fulfilling the trade.
The government bodies involved in the trial are the Australian Border Force (ABF), the Infocomm Media Development (IMD) and Singapore customs. Several other industry participants have also been part of the trial.
The trials were about establishing that trade documents could be issued and verified digitally between two different systems. It was one of a kind trial involving multiple industry players and governments from two different countries to achieve cross-border document interoperability.
The trail builds on the Australia-Singapore Digital Economy Agreement that was first announced in November 2020. The mission is to simplify the cross-border transactions between the two countries. Eliminating the paper documents is the first step towards easing trade processes.
The new system to work as a “circuit breaker”
The current cross-border trade is engrained with paper documents in almost all trade levels. Most trade documents are usually issued on paper, and businesses need to wait some time before receiving a hard copy. They then use couriers to dispatch the documents to the various recipients. That is what the new system looks to simplify. The digital verification and the verifiable documents look to bring a new system that acts like a “circuit-breaker.”
The verifiable documents help save time and money. The blockchain world comes with assured accuracy needed for trade efficiency. In the end, it will ensure effective and efficient cross border transactions.
Will the use of blockchain technology expand to other sectors?
The Australian Federal government is one of the leading supporters of blockchain technology. It believes in using the power of the new technology to improve efficiency in various sectors across the country. This is evident by the publishing of the National Blockchain Roadmap in 2020. The document highlights various opportunities across the country that could be improved through the use of blockchain technology.
The other way through which blockchain technology expands in Australia is through cryptocurrencies. Australia is one of the countries with clear regulations regarding digital currencies. It recognizes digital currencies as assets and subjects them to capital gains taxes.
By trialling the blockchain document verification, Australia is keeping its positive outlook towards blockchain technology. Already, cryptocurrencies have eased cross border transactions. They have eliminated the need for currency conversion which can deplete value and take time. Instead, it is all about instant and low-cost transactions through crypto.
Once the blockchain ID verification is implemented, more countries are likely to follow suit, just as more sectors will.
