Saudi Arabia believes that blockchain technology can greatly ease cross-border trade by allowing businesses to prove financial compliance in multiple countries. In its proposal to the G20’s business community, Saudi Arabia advocated for blockchain to remove geographical barriers for businesses. Saudi Arabian business leaders proposed a business passport that would allow businesses to participate in the global value chain (GVC). The business leaders tabled the report before the B20 group and the Business at OECD.
The business passport is meant to reduce cross-border barriers.
The GVC passports are meant to reduce the barriers that businesses encounter, such as cross-border fragmentation, impeding the free flow of capital, goods, and services. Saudi Arabia business leaders’ proposal aims to reduce the bureaucratic processes involved when a business wants to offer its products in another country. The new blockchain passport would especially be beneficial for small and medium enterprises. The report states that the new business passport would provide an authenticated, authoritative, verifiable financial fingerprint of a given entity, enabling it to operate within GVCs without the need to reproduce the same documentation on multiple occasions, reported Saumil Kohli.
“Blockchain would speed up customs procedures and trade financing.”
The report states blockchain will play a key role in the international business. Saudi Arabian leaders said the technology could “speed up customs procedures and trade financing.” Blockchain can create trusted sources of standardized information that the GVC system will rely on. Containing a much richer dataset than that exists in any one system today, it can be used as an infrastructure for identity attestations, the report stated. The result is delivering a range of benefits for participants, offering faster, cheaper, and safer alternatives by operating on secure databases versus loosely connected participants of traditional processes,” the report further elaborated.
Blockchain technology is currently being adopted in many countries amid the global pandemic. The technology has been hailed as revolutionary and is being utilized worldwide in different sectors.