The United Kingdom has introduced a groundbreaking initiative to digitize trade documents, which could leverage the underlying technologies of cryptocurrencies, as stated by the government.
The Electronic Trade Documents Act 2023 has officially become a law on July 20, marking a significant departure from centuries-old merchant laws by enabling the storage and distribution of trade documents in digital formats. These laws are set to take effect this autumn.
Notably, the act is technology-neutral and permits the adoption of blockchain technology if it satisfies the reliability test, as revealed by a government spokesperson speaking to CoinDesk.
Landmark Act Recognizes Electronic Documents as Legal Equivalents, Embraces Blockchain Technology for Trade Efficiency and Security
The Law Commission for England and Wales, the independent statutory body responsible for drafting the bill, estimates that billions of papers are circulated annually in global shipments, as traditional transportation is the only current method.
The real significance of this act lies in its recognition of electronic documents as legally equivalent to paper, as long as they meet specific criteria. Law Commissioner Sarah Green conveyed this insight to CoinDesk through an email, highlighting that blockchain technology happens to be one of the avenues that can fulfill these criteria.
Furthermore, electronic trade documents offer heightened security and compliance by facilitating efficient record tracing, primarily through the use of blockchain and distributed ledger technology. The government issued a press release emphasizing this aspect of the act.
James Butterfill, head of research at CoinShares, views this development as a “step forward” for the U.K. Utilizing blockchain technology to digitally distribute trade documents could enhance workflow efficiency and, in the long term, reduce costs and ensure better compliance, he added.
Source: CoinDesk
