A new report released by the World Trade Organization (WTO) reveals that the international trade regulating body sees strong potential in blockchain technology, and specifically highlights Ripple as a disruptor of existing systems. The report also covers the scalability issue of blockchain, contrasting Bitcoin and Ethereum, and specific applications of the technology, such as in supply chain networks.
Titled “The future of world trade: How digital technologies are transforming global commerce,” the WTO covers the several ways in which blockchain could streamline trade and finance. While the report is complimentary on the whole, it does argue that there are taxation, consumer protection and privacy challenges.
WTO Director-General Roberto Azevêdo underlines the ability of technologies like blockchain to benefit small and medium enterprises, cutting trade costs and changing trade structure for the better:Beyond easing trade in goods, digital technologies can facilitate services trade and enable new services to emerge. The Report predicts that the share of services trade could grow from 21 per cent to 25 per cent by 2030. Other effects could include, for example, Blockchain helping smaller businesses to start trading by supporting them in building trust with partners around the world.
As for Ripple, which is onboarding several more banks and launching products, the WTO is hopeful about its efforts to drastically reduce the cost of cross-border payments, saying:Ripple has ambitions to circumvent the correspondent banking model through its distributed ledger platform. It gives banks the ability to convert funds directly into different currencies in a matter of seconds and at little to no cost, without relying on correspondent banks…the company has licenses with more than 100 banks and financial institutions, but it seems that only a limited number of large operations have taken place to date. Banks are still testing the system.