Experts discuss blockchain applications in facilitating international trade. (Photo courtesy of Vietnam Blockchain Association) Hoang Van Huay, Chairman of the Vietnam Blockchain Association(VBA), made the statement at a conference on “Blockchain Technology: Initiatingthe International Trade Process” held in Hanoi on April 5.
Cross-border trade has become more vibrant than ever with thegrowth of the Internet and the technology sector in general. Experts all agreethat technology contributes to bridging the gap. However, it brings newdifficulties in the process of communication, data storage, dealing withpaperwork, contradictions in setting standards and consensus on trade policyamong countries.
The World Trade Organisation (WTO) on the same day released areport forecasting that the global merchandise trade volume this year will fallto 1.7%, lower than that of 2.7% in 2022 due to heavily influenced by fluctuationsrelated to rising energy prices, inflation and monetary policy. Therefore,businesses need to consider cutting costs for cross-border trade at this time.
Huay added that blockchain technology emerged and is expected tosolve the complexities of international trade. The WTO argues that blockchaincould be revolutionary for global trade. Specifically, blockchain has theability to cut trade costs by automating manual processes in management,encrypting foreign trade documents and letters of credit (L/C), speeding uppayment operations, and automatically executing agreements through the help ofsmart contracts stored on the blockchain.
Do Ngoc Minh, a member of the VBA’s Technology Department said:“We are facing challenges when user data is overused by platforms acting asthird parties, taking advantage of serving users and providing fakeinformation. Blockchain is the foundation platform to help form a digitalsociety, where everyone can participate, contribute, collaborate and transact,forming a digital economy without having to worry about the safety andintegrity of the system.”
Minh said blockchain helps create new concepts such as smartcontracts, Central Bank Digital Currency (CBDC), the token economy withnon-fungible tokens (NFTs), metaverse, Decentralised Finance (Defi),Decentralised Autonomous Organisation (DAOs). Although blockchain is witnessingtrial and error as well as success and failure, it has been playing a role inglobal governments, organisations and commerce.
According to a forecast by MarketsandMarkets, theblockchain-related market in Vietnam could reach a value of nearly 2.5 billion USDby 2026, a five-fold increase compared to 2021.
Many organisations have realised the role of blockchain incommercial activities and start to apply it.
Nguyen Quang Thong, Director of Digital Banking at Nam A Bank,said that risk management at banks often consumes a huge amount of money. Inparticular, with trade finance documents related to documents of origin, it isrequired to ensure reliability. Blockchain could be used to ensure transparentoperations, reducing customer verification time and costs.
In addition, traditional international payment activities arestill going through the Society for Worldwide Interbank FinancialTelecommunication (Swift). However, the centralised processing through thisnetwork still has problems related to speed, operating costs, and ensuringaccurate and safe transfer orders. The development of blockchain technologycould form payment networks that make cross-border money transfers faster andsafer.
"We hope to have support from the Government and technologyorganisations to promote cross-border commercial payment platforms,” Thongsaid.
Explaining the reason that making the Vietnamese blockchainplatforms have not been popular, Eric Hung Nguyen, CEO cum Co-Founder at SporesNetwork (the ecosystem that supports blockchain projects) said that the legalgap makes attracting investment into Vietnamese blockchain projects facingdifficulties.
“I have worked with a lot of foreign investors, but when talkingabout blockchain projects in Vietnam, they were afraid that the lack of a legalframework may affect the projects’ operation. For example, blockchain can beused in L/C transactions at banks, but if the law does not recognise it, it hasno value,” Hung told the conference organised under the 32nd VietnamInternational Exhibition (Vietnam Expo) held in Hanoi from April 5-8.
"Instead of choosing familiar topics such as Vietnam'sdevelopment and integration, sharing success, Vietnam Expo 2023 will offerpractical applications and solutions to commercial operations forbusinesses," said Nguyen Thu Hong, Deputy Director of VINEXAD – theVietnam Expo 2023’s organiser.
"In addition to showcasing products and services and sharingfrom domestic and international businesses at the event, blockchain technologyis prioritised to exploit its potential while being the optimal technology inthe digitalisation process of the trade sector.”
VBA is currently acting as a bridge between businesses in theindustry and regulators, especially international connections with a range ofactivities, starting with The Connect event in Thailand on March 15./.
VNA
