Initiative announced to explore Blockchain based trade finance and logistics solution in Dubai
A new Blockchain initiative has been launched through a collaboration between IBM and Dubai Customs and Dubai Trade ( a government platform offering integrated electronic services from various trade and logistics service providers in Dubai under a single window) and its IT provider, DUTECH.
The project will explore a trade finance and logistics solution based on Blockchain for the import and re-export process of goods in and out of Dubai, replacing paper-based contracts with smart contracts. It will leverage Watson IoT for device-reported data to update or validate smart contracts through all stages of the flow of goods.
The IBM press release gives the example of fruits exported from India to Dubai, then processed into juice and subsequently exported out of Dubai to Spain. The solution would transmit data about the state of goods and the status of the shipment, allowing key stakeholders to track the movement in real-time. The solution will use IBM and Hyperledger Fabric (an open-source collaborative effort created to advance cross-industry blockchain technologies, hosted under the Linux Foundation).
This is the latest step in the government’s Blockchain strategy. The Dubai government has been exploring many different uses of Blockchain technology and several initiatives were announced during 2016. In February, the Global Blockchain Council (GBC) was launched with 32 members, including government entities, international companies, leading UAE banks, free zones, and international Blockchain technology firms. Plans were announced in October to use Blockchain technology for all government documents by 2020. Pilot projects were launched in areas ranging from inheritance and property transfer to diamond trade and health records.
Dubai's status as a key global trading hub is critical for its prosperity and economy. Blockchain technology could make the processes faster and more transparent to all stakeholders.
Other entities playing different roles in the initiative are du, a UAE-based telecommunications service provider, Emirates NBD Bank, as the letter-of-credit issuing bank, Banco Santander, as the letter-of-credit responding bank; Aramex, as the freight forwarder; and a leading Airline, as the airway carrier.
This trade finance and logistics blockchain-based solution aims to replace paper-based contracts with smart contracts; leverages Watson IoT for device-reported data to update or validate smart contracts; and integrates all the key trade process stakeholders from the ordering stage, in which the importer obtains a letter of credit from their bank, through the intermediary stages of freight and shipping, and ending with customs and payment.