The United Kingdom has entered a transformative phase in the realm of trade documentation. Passage of the Electronic Trade Documents Act 2023 this past July heralds a digital revolution, one wherein trade documents can be stored and distributed digitally. Poised to repeal centuries-old merchant laws this autumn, the new legislation hints at an intriguing possibility – the use of technologies that are the cornerstone of crypto.
The act, in its technology neutrality, broadens the horizon with potential for blockchain technology, as long as it passes a reliability test. Every year, billions of papers change hands globally with shipments as a consequence of the existing norm. The new law begins to challenge that norm and cybernetically shift the traditional paradigm.
Law Commissioner Sarah Green perceives valuable implications of the act. In an electronic environment, documents may be regarded as legally similar to paper, provided they meet specific criteria which the blockchain technology can fulfil. Thus, the legislation seems to be a harbinger of the blockchain potential, subtly indicating the technology’s critical role in this digital transformation.
A significant advantage of electronic trade documents is the leaps in security, compliance, and record traceability it offers, potentially being facilitated by using blockchain and distributed ledger technology, as stated in a government press release. Harnessing technology for such purposes would not only serve to augment the realm of securities but would spell ease of operation and accessibility of data.
James Butterfill, Head of Research at CoinShares, labels this as a progressive development in the United Kingdom’s efforts to embrace blockchain technology. Leveraging the technology to digitally distribute trade documents could culminate in workflow and efficiency improvements, stimulate cost reductions, and guarantee compliance after clearing necessary tests of reliability.
However, as promising as it may seem, the execution and transition to digitising trade documents is undoubtedly a tremendous task. Ensuring the reliability and security of the used technology will pose significant challenges, and the stakes are high as to allow for even a tiny loophole.
To summarise, the advent of the Electronic Trade Documents Act 2023 in the UK has sparked conversations on the adoption of blockchain technology across professional sectors. As the sense of anticipation builds towards autumn when the act comes into effect, the world watches in anticipation as the UK marches towards a digital future. Yet with all said and done, only time would tell how the convergence of law and technology plays out in actuality.
Source: Coindesk
