Technology, international trade, and the broad reach of globalization have led to increased complexity in supply chains that span several countries. You can visit bitcoin-revolutionapp.com to get 100% control over your money while trading in bitcoin. Governments and corporations must stay on top of an ever-changing set of regulations for cross-border transactions.
The below-mentioned portion will identify various potential legal issues with blockchain technology applications in these contexts, including regulatory compliance obligations or risks under existing anti-money laundering or counterterror financing laws.
It also explores possible public policy approaches to mitigate the risks identified by such consideration. The real potential of blockchain beyond its use as a currency is in the way it securely logs information and executes transactions. This decentralized ledger technology significantly affects global supply chain management, payment processing, and legal issues across industries.
Compelling use case of blockchain:
Supply chains are complex systems that involve many different parties – manufacturers, suppliers, logistics providers, customs authorities, freight carriers and freight forwarders – in other words: logistics service providers (LSPs). LSPs are organizations that provide services to facilitate the movement of goods from an original seller to a final buyer. They provide such services as warehousing and logistics but also financing or brokerage services.
Supply chain fraud and breach are among the most significant risks, especially in the aftermath of an economic crisis or a natural disaster. To respond to these threats and challenges, businesses must improve their processes and procedures. It includes enhancing security levels as well as transparency and efficiency improvements.
The blockchain is an open-source technology that companies can use to securely build applications or platforms that extend beyond just currency exchange and monetary transactions. For example, consider the way it is used in Bitcoin (an online currency), where it acts as a universal ledger – one that cannot be manipulated by anyone or controlled by any central authority and keeps track of all transactions within its network.
But it is not limited to currency-exchange networks because the organization can use it in several ways, such as securing and logistically tracking physical items in transit. For example, each party involved in the chain has access to information about the status of each shipment and will know when something is misplaced or missing. In addition, businesses that use blockchain technology can create records for all of their current inventory or goods with a date stamp on each item.
Legal Issues for blockchain:
Blockchain technology and digital currencies have raised concerns regarding legal issues and their potential impact, primarily in the following areas:
- Financial services issues, including the regulatory regimes under which certain financial services are provided;
- Tax and Accounting issues, including the tax treatment of digital currencies as well as accounting rules on how financial assets should be accounted for;
- Capital Markets Regulation, such as rules that may restrict or ban certain payments (for example, payments denominated in a currency other than that of the payment recipient) or restrict certain cross-border transfers of funds or other assets.
- In some countries and jurisdictions, there are restrictions on how funds can move internationally. And these are some of the legal issues for blockchain.
What if government resolves these legal issues?
If the government resolves these public legal issues, the blockchain can ultimately help the logistics industry.
For the global logistics industry, cross-border parcels and freight shipments are the primary means to deliver goods to customers worldwide. As a result, the supply chains of online retailers come under increasing pressure from the growth in eCommerce sales.
People are buying more goods online more efficiently than ever before, and retailers and freight forwarders must cope with this demand. In addition, it has led to the developing of new models for cross-border shipments. The goods typically move within a country through shipping carriers and then move to the next phase in another country.
There is a need for cost-efficient storage and procedures for ensuring delivery as per signed agreements with customers. In addition, increasing international trade requires transportation across borders for goods sold to customers across the globe. This kind of cross-border transportation can be costly, a big problem for online retailers competing with local retail outlets.
Blockchain technology can help overcome these issues. The blockchain as a ledger has been termed by some as a “second internet”, even though it does not have the same functionality or capabilities as the original Internet. For example, the blockchain does not have servers that need to be updated and checked.
Possible public approaches to mitigate the legal issues:
- Ensure that current laws continue to apply to blockchain and digital currency transactions.
- Ensure existing laws apply to digital currency transactions as they are today and are adapted to technological changes.
- Utilize the inherent benefits of the blockchain and also bring in oversight tools such as public registries, audits and regulators while preserving its inherent security methods.
Developing policies with a technological dimension is essential to achieve any of the above public policy approaches. In other words, companies should use technologies within their current application context instead of being seen as entirely new and different.