Blockchain Activation in Trade, A Necessary Evolution in EU Parliament Members’ Idea

Last Modified:15 Jun 2019 10:09:41
Blockchain Activation in Trade, A Necessary Evolution in EU Parliament Members’ Idea

Taking the trades- and businessmen’s view regarding the usual problems they are engaged in, finding some new innovative, though perilous, solutions seems a fundamental revolution in the business world. Every so often the business frightens the people because of unexpected ebbs and flows which are inherent in the nature of this field, and fortunately, it is usually followed by a remedy offered by the economists and specialist who are mostly from the elites.

Causes for introducing Blockchain technology

Frequent difficulties the merchants are involved in, especially while doing international transactions have urged them to find the best and easiest clue to get rid of them. Using Blockchain technology is one of those solutions which have the capability to remove some of these challenges; nonetheless, businessmen cannot apply it in their economic activities until some authorities start legislating, enforcing and confirming its everyday uses in their daily dealings and contracts.

European Parliament welcomes Blockchain

Luckily, the European Parliament (EP) has announced on Dec. 13. The need for having Blockchain technology as a necessary part of economic affairs.

Which better support can be sought for its useful application in the market?

The first step carried out by EP was reporting its necessity in financial affairs, then presenting a resolution the theme whereof was to encourage people to accept Blockchain due to its ability to make the future of the trade more fruitful. The resolution title can prove its objective, though: “Blockchain, a forward-looking trade policy.”

EP’s main reasons to accept Blockchain

Among the most motivating features of Blockchain causing EP to make such decision are:

• transparency in financial transactions regarding the parties

• meeting the need for a continuous, immediate flow of the procedure

• decreasing the charges incurred on the parties

• removing any risk of fraud or laundry

• resolving tax problems which are usual in every country regardless of the size and economic condition

• high security and safety in financial transfers and transactions.

Furthermore, EP also stated about the uselessness of Free Trade Agreements (FTA which lets EU traders to interact with non-EU countries and vice versa) and the tendency of exporters and importers to apply preferential tariffs. These tariffs do exist in Blockchain technology, too. Uploading all the documents once is a requirement for the Blockchain to make enforcement of preferential tariffs possible. Furthermore, the verification process by the authorities will be possible through Blockchain.

What was said about international transactions can be helpful in small and medium-sized businesses too. The parties’ more apparent relationships, riskless payments and the presence of smart contracts (through EDCCs; that is, Executable Distributed Code Contracts) are considered as helpful characteristics for them.

Current challenges of Blockchain

This type of security is not the same as cybersecurity since it is not controllable as the former and the key source of anxiety for the EP. The other might be its applicability power around the world which is not at its suitable and popular level yet; however, doing some pilot tests to make sure about its performance and forming an advisory committee are some suggestions proposed by EP to help minimize the above problems.

Blockchain future

Signatures of European countries like France, Italy, Spain, Malta, Cyprus, Portugal, and Spain under a declaration about Blockchain was perhaps an effective measure which was followed by EP resolution.

In spite of these attempts to endear Blockchain technology among various groups of the society either in the domestic economy or a foreign one, there are still some opponents who don’t believe it as a good replacement to traditional economy. It is not limited to Blockchain itself. European Central Bank, for example, does not agree to even issue any digital currency as a sign of accepting the digital and virtual world.

EP and its decisive acknowledgment on Blockchain technology profitability in facilitating the business process for both businessmen and the governments after its confirmation by some influential countries in southern Europe, besides what is underway in various organizations and foundations around the world which are being published every day can be a silver lining in the present market. Strong legislation and enforcement in terms of Blockchain usage in various financial transaction regardless of its scope can be the next step in its success.