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Smart Contracts: What Are They and What Do They Mean for International Trade?

Editor’s Note: The below article is the last in a three-part series about blockchain and its implications on international trade. Read the first and second articles here.

By Sammy Naji

Of all the blockchain-based innovations, smart contracts running off blockchain may be the most transformative for international trade.  Smart contracts will go beyond eliminating the reliance on physical paper in international transactions by potentially removing the need for financial intermediaries altogether.  Smart contracts can be described as self-executing contracts that run off code, which initiate performance and automatically impose penalties when predefined conditions are met.[1]  They essentially serve as automated escrow robots.[2]

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Blockchain Technology: Its Impact on Bill of Lading and Trade Finance Systems

Editor’s Note: The below article is the second in a three-part series about blockchain and its implications on international trade. Read the first article here.

By Sammy Naji

Applying blockchain technology to international trade allows stake holders to take advantage of a a much more efficient and transparent technological infrastructure than the current outmoded paper-based system. Prior to blockchain’s emergence, digitizing negotiable trade documents, without creating the potential for fraud, could only be accomplished through expensive and closed members-only systems.[1]  With blockchain, however, an accurate record of possession and title can be maintained without the need for paper processing or a centralized intermediary.

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