A new study published by the World Trade Organization Blockchain & DLT in Trade notes that more than 80% of companies in the distributed ledger technology segment have improved their performance amid the pandemic. The need for online solutions and remote satisfaction of demand has accelerated many processes and implementations.
Experts focus on two areas of development of distributed ledger technologies in trade: detection and tracking of goods or track-and-trace, as well as digitalization of processes.
Since November 2019, some projects have left the market or repurposed, but most of them were able to find resources to continue working on the product and start putting it into operation. If at the end of last year the average value of the “maturity indicator” of DLT projects in trade reached 2.3 points out of 5, now this indicator has grown to 3.3 points, according to the WTO.
Several projects received a maximum of 4.5 points. In particular: Komgo, Skuchain, Dltledgers, VAKT, and edoxOnline are in the category of trade finance, factoring, and supply chain finance, Insurwave – among insurance services, Calista and Tradelens – in freight and delivery. However, none of the WTO-rated projects have yet demonstrated a fully functional version of the product.
According to the study, the main obstacle in the development of the DLT market and the scaling of commercial solutions, the participants consider the unsettled legal environment: the lack of clarity and an incentive regulatory framework.
However, the crisis caused by the pandemic has accelerated the transition to new technologies. Decentralization not only allows you to get rid of intermediaries and solve the problem of low levels of trust, but also to create fundamentally new services and business models. Many blockchain solutions have approached the stage of commercial exploitation and are beginning to replace traditional platforms. The level of loyalty to DLT infrastructure on the part of banks continues to grow.
They also tried to assess the readiness of credit institutions for the transition to decentralized trading solutions at the international level. A study by ICC cites the following figures: as of the end of summer 2020, 22% of banks have integrated decentralized solutions for trade finance operations.
Thus, over the next two years, we will see a new generation of DLT solutions enter the trade finance market. As the COVID-19 crisis has exacerbated the problem of a lack of safe automated tools. And this is exactly the area where blockchain technologies are showing their best.