Backing blockchain with strong policy
We are now seeing intense competition to replace laborious centralised processes of tracking goods with more decentralised supply chain platforms powered by blockchains.
Discovering what policy changes are necessary to facilitate this new economic infrastructure, however, will require significant policy entrepreneurship through a new dedicated international policy coordination body.
The new body would facilitate experimental trials of regulatory recognition, coordinate new free trade agreements, and encourage the emergence of technical and information standards.
Blockchain technology also offers a new way of governing information along the supply chain – especially amongst those that lack a degree of trust. While most modern records are maintained and updated by centralised third parties – such as banks or governments – information stored in blockchains are managed through tamper-resistant and decentralised processes.
Some information currently entrusted with third parties will shift to decentralised blockchain governance. Recent surges in interest and investment in the technology attempt to gauge where the technology will be useful and how organisational boundaries will shift.
The modern global economy is ultimately made of supply chains. These supply chains link together the mining of raw materials – through their transformation and production – and the final retail process. All of this must be tracked, often across several countries and between parties where strong business relations are yet to be forged.
Understandably, governments, consumers, and producers demand a wide variety of information about goods. Questions may range from whether a product falls under fair trade standards to how fresh its ingredients are.
But accurate answers are sometimes difficult to come by because of the logistical difficulties that arise in recording each individual bit of information. Tracking the millions of parts in a modern aeroplane or the production conditions of a sub-component in …read more