DLT (distributed ledger technology) is a technology that in summary consolidates information in one decentralized and immutable database for all stakeholders involved. Once a percentage of the stakeholders agree that an input or a change in the database (transaction) is valid, no one can undo this.
As we learned in the course, GVCs require a lot of coordination and collaboration between governments, and digital technologies can improve customs performance, reduce shipping costs, and increase GVC expanison. This means access to trustable data in real time is crucial. DLT is far from being in its infancy, I would say it is in it´s teenage years. It is old enough we can finally see it´s potential, but not of legal age yet.
I will expand on three of the DLT technologies that I believe are changing the GVC landscape today:
TradeLens is an open and neutral supply chain platform underpinned by blockchain technology. It enables true information sharing and collaboration across supply chains, thereby increasing industry innovation, reducing trade friction and ultimately promoting more global trade.
The TradeLens platform has been jointly developed by IBM and GTD Solution Inc. (a division of Maersk). Together each partner works to ensure the product and business model is aligned to meeting the needs of the shippers and supply chain operators around the world. To this day, TradeLens has processed over 29 million containers, 1.5 billion events and 12. 9 million published documents. TradeLens is built on Hyperledger, developed by the Linux Foundation.
Marco Polo: The Marco Polo Network is the largest and fastest growing trade and working capital finance network in the world. It is a joint undertaking between technology firms TradeIX and R3, the world’s leading financial institutions, and their corporate clients.
Launched in 2017, the Marco Polo Network provides an open enterprise software platform for trade and working capital finance to banks and corporates and a distributed, blockchain-powered solution that allows for the seamless and secure exchange of data and assets between participants.
Its mandate is to provide a dramatically improved customer experience using cutting-edge trade and working capital procedures, to enable seamless data integration and exchange between trading parties. This type of network provides the basis for revenue growth and a simultaneous reduction in costs, time and risk.
Marco Polo aims to gather together the entire trade ecosystem. It is a network at its core, uniquely positioned to enable its members to benefit from “network effects”. In other words, every time a new organisation joins, the value of the Marco Polo Network increases for every other participant. Marco polo is part of the Corda Network, developed by bank consortium R3.
Ripple: Ripple is focused on enabling financial institutions to send money across borders, instantly, reliably and for fractions of a penny.
With over 450 customers (including central banks) Ripple´s aim is to provide a level playing field for cross border payments. This makes it possible to send money from Mexico to the Philippines in 3 seconds, using the native currency XRP. They are focused on financial inclusion and banking the unbanked. Through their investment initiative Xpring, and UBRI (university blockchain collaboration initiative) they are accelerating research, development and innovation in digital payments.
Ripple uses the XRP Ledger, developed by Jed Mcaleb, Arthur Britto, Chris Larsen, and David Schwartz (the former three are Ripple founders)
These three technologies will enable GVC growth by reducing friction and eliminating some of the pain points GVCs have today. One very important factor to consider is they are all built on open source software. Hyperledger, Corda, and XRP are all open source. These three technologies also have focused on interoperability since the beginning, Corda actually uses XRP for settlement, and Ripple is part of the Hyperledger Consortium. Those days of “one blockchain to rule them all” are far over.
Kristalina Georgieva said the Covid Crisis could be the Great Retrace or The Great Reset, it’s up to us how we want it to be remembered. Those of us who follow blockchain closely know “2020 is the year of the digital asset”, the technology is there, it´s been tested, it´s scalable and it´s been adopted. We just need regulatory clarity.