What can APAC countries learn from the EU request to adopt blockchain?

Some experts believe that it is up to governments to promote the use and establish appropriate frameworks to drive blockchain-based technology applications. Source: Shutterstock

BLOCKCHAIN, like a decentralized public transaction book, has been theorized and explored for use beyond cryptocurrencies to bring positive solutions to some of the biggest problems in the world.

And while companies have been talking about blockchain for years, there are almost never blockchain solutions driven by the company.

The complex nature of technology and the lack of understanding of the value it brings to an enterprise could be among the reasons for the slowness of adoption. Some experts believe that it is up to governments to promote the use and establish appropriate frameworks to drive blockchain-based technology applications.

In the European Union (EU), the European Parliament (EP) seems to have listened to the experts and called for measures to promote the integration of blockchain technology into exchanges in a recently published provisional resolution.

The resolution, Blockchain: a far-sighted commercial policy is a document that recognizes blockchain technology as "a DLT technology (Private, allowed, distributed ledger technology") and "various case studies and industries will derive a different utility from a combination of private / public blockchains, permissions / unauthorized ".

Towards a global business based on blockchain

Among other things, Parliament has recognized that technology, while still under development, could improve EU trade policies – free trade agreements and mutual recognition – as blockchain allows for greater transparency of the supply chain, simplify current business practices, minimize costs and opportunities and corruption and improve data security.

Blockchain, according to the legislative body, is still evolving in the international commercial space and, therefore, requires an environment favorable to innovation and favorable without any legal uncertainty.

All parties involved in both public and private business would have access to a permanent database containing transaction documents with blockchain technology that will help build trust and facilitate compliance validation, as demonstrated by some regions of the EU that have already developed and adopted the technology.

Ensure compliance and global standards

Beyond that, the EP recognizes that cross-border data flow is a crucial element of international trade that can be made transparent via blockchain.

However, this could be a challenge to implement the GDPR – a regulation in the EU data protection and privacy law for all individuals within the European Union and the European Economic Area.

The EP also stressed that any blockchain-based solution must be developed with global interoperability standards in order to allow cross-border transactions and long different blockchain within a supply chain.

Perhaps the most important thing is that the European Parliament has also asked the European Commission to draw up guidelines for blockchain applications for international trade and to form a blockchain advisory committee within the committee.

"The EU has the opportunity to become a leading player in the field of blockchain and international trade, and that it should be an influential actor in shaping its development globally, together with international partners" , reads the resolution.

Key takeaway for APAC

In the Asia-Pacific region, the development and adoption of blockchain technology has been mainly focused in the fintech space and some countries that are more mature in the digital path as Singapore have started to implement the technology in other areas.

While individual countries are conducting their blockchain initiatives in various sectors, what is lacking is a regional partnership with a standard guideline to unlock wider adoption.

First of all, the nations of the region must establish a solid framework that takes into account the unique regional challenges and regulations that could serve as a basis for the development of blockchain technology.

The Asia-Pacific Economic Cooperation Regional Trade Forum (APEC) has already carried out digital interoperability solutions among its member economies.

However, the organization needs to be even more proactive in allowing collaborations between its member countries to develop robust blockchain-based solutions.

While the initiatives led by individual governments will certainly lead to the adoption of technology in the coming years, the key to unlocking the true potential of the blockchain is still a common regional framework and a joint effort among the economies.

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