Countless organizations nowadays encounter difficulties to conduct business internationally and establish connections with prospective clients overseas. Blockchain technology offers an innovative form of payment and the possibility for businesses to generate shared ledgers for all parties to the transaction. Because the digital assets are made unchangeable and managed to keep accessible by cryptographic hashing technology and decentralized mechanisms, the technology has become increasingly influential. Cryptocurrencies are a variety of digital currency or virtual currency that operates on a technology established as blockchain. Blockchain technologies have the potential to radically overhaul how international businesses run their operational processes. This article examines how blockchain technology affects international trade law and cross-border trade, focusing on the importance of this technology and how it might modify and advance numerous aspects of global trade.

The popularity of blockchains has skyrocketed recently. As the name suggests, a series of blocks containing information makes up a blockchain. The advancement of blockchain technology has recently been the focus of many individuals. Many others eventually realized that this technology could also be extended to certain other services, such as development of digital notary, the storage of medical information, or even the collection of taxes. This approach, which was published in 1991 by a group of researchers, was meant to authenticate and put a timestamp on digital documents enough so they could not be altered or backdated; therefore, in this way, it functions nearly like a notary. Blockchain initially emerged in 2008 as part of the Bitcoin project with the objective of facilitating direct online financial transfers between parties without the use of middlemen. A distributed ledger that is actually completely transparent to everybody is called a blockchain. They have always had an important and intriguing quality that makes altering data exceedingly challenging once it has been transcribed inside a blockchain. Cryptocurrencies are secure from intellectual property theft, and are safeguarded by robust and sophisticated encryption methods thanks to blockchain technology. Bitcoin’s use in the finance sector seems to be just one explanation of a minor application that is based on blockchain technology. Blockchains employ a P2P (peer to peer) network, which almost anyone can join, rather than just a centralized organization to maintain the chain. Additionally, this technology can make trade very little paper-intensive, economically effective, compliant, and socially responsible while also lowering costs.

Blockchain Functions:

By granting supply chain transparency, dependability, transparency, and productivity through the automation of collecting information, blockchain can help promote sustainable and responsible sourcing. This can make it easier to monitor materials and products from their original location to their final destination and give businesses access to the credible data that may be critical to the successful implementation of their ESG programs. By modernizing processes and curtailing the number of government agencies and officials engaged in each transaction, blockchain may possibly prevent corruption. Because blockchain networks demand absolute, decentralized consensus within the network, they would enable information asymmetry in trade. Blockchain might help companies make sure the appropriate product reaches the right consumer. Theft might be avoided, and brand value could be preserved by closely watching each stage of a product’s transaction history. Blockchain technology has a promising future in international trade because it may help cut bureaucratic system, replace time-consuming paper trains that thwart tracking goods, and substantially lower losses triggered by payment delays.

Analysis of the impact of Blockchain technology on International Trade:

Global cost and demand are drastically impacted by blockchain. It can bring down trade costs and enhance SME supply chain advantages and supply chain transparency. The main impact of blockchain-based trade facilitation solutions would be to safeguard economic equality between parties, simplify some operations, as well as provide a reliable and trusted network for transfers of documents. Trade barriers based on lack of trust can be eliminated by blockchain technology. For businesses doing business both domestically and abroad, blockchain has advanced a framework that is more effective. The financial industry is another area where blockchain technology has had a massive impact. By making it easier to contact suitable investors through marketplaces, it will expand the sources of funding available to smaller players. Standards and procedures based on blockchain technology are indeed being constructed, with the financial market setting possessing the most technically advanced regulations and procedures. Many organizations have also been compelled to revolutionize their obsolete technology as a result of the possible impact of blockchain technology on international trade financing.

Merits and Demerits:

Therefore, the blockchain technology has had a meaningful impact on international trade in a multitude of settings. It has also served as an example of the many advantages the technology offers, many of which we have already covered in the points above. Notwithstanding, for blockchain technology to flourish in the world of international trade, it must prevail over a number of obstacles. The technology is linked to a number of issues, including questions about the law, regulations, and public policy. To focus on the variety of potential issues, national and international laws have not progressed satisfactorily. Furthermore, there are yet no established benchmarks for blockchain networks that would educate global corporations. There are a number of methods that can be employed to alleviate the blockchain’s shortcomings in fostering global trade. The development of appropriate regulations to direct the implementation of the technology is the major approach to solving the problems. Finding the most applicable use cases in international trade necessitates a multi-stakeholder attitude. The development and implementation of frameworks that support network interoperability may be aided by a multi-stakeholder approach. As a result, the multi-stakeholder approach can aid in supplying a clear legal standing to direct blockchain transactions across several jurisdictions. Seamless integration and operational expenses are two more blockchain-related threats in international trade. Remarkably, despite the fact that blockchain is known for reducing costs due to its improved efficiency, the computations it performs require a lot of electricity. Global supply chain disasters have always been a part of international trade and will persist to be so, but as blockchain use grows, they may become less bothersome in the near future. However, according to a new analysis of customs office by the World Trade Organization, many are quite positive about blockchain’s potential and greater chance for cooperation with trade stakeholders to increase transparency and reduce transaction costs. The computing processes are practical from a technological standpoint, and as blockchain regulations for governance and interoperability develop, the use of this technology for cross-border payments may become the norm for industries.


Blockchain technology has had a tremendous impact on international trade by strengthening performance of the supply chain, simplifying the paper-based trade process, and boosting quick and efficient cross-border payments. Blockchain can improve product accuracy and consistency with traceability and supply chain efficiency by offering high levels of transparency. The World Trade Organization (WTO) appears to think that blockchain’s impact on global trade will be groundbreaking since it can break down many trade barriers. International trade has been changed by blockchain technology, and it has the ability to do so again as this cutting-edge technology is still in its infancy.

Contributed by- Sri Moukthika

O.P. Jindal Global University (LLB 2023-26)

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