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Dubai Customs has turned to blockchain technology to improve its internal processes while providing a veritable solution for enterprises involved in the supply chain vertical.

In its press release, Dubai Customs stated that the launch of the blockchain solution is an attempt to digitize commercial processes in the Emirates and the wider Gulf region. The solution is expected to assist enterprises in tracking items in transit while promoting transparency and reducing paperwork traditionally associated with the supply chain process.

On the other hand, the government sees multiple benefits of the launch apart from improving supply chain processes. For starters, Dubai Customs says the platform will be key in fast-tracking the customs clearance process via smart contracts, saving business enterprises a fortune in time and fees.

With a detailed description of items listed on distributed ledgers, customs officials opine that fraudulent cross-border activity and innocent errors will be minimal. Another perk associated with blockchain for officials is improved compliance, while others point to increased security levels as a result of decentralization.

Besides the immediate benefits to customs processes, Dubai officials have their sights on transforming Dubai into a smart city.

“This innovation reflects our vision to make Dubai a global hub for trade and logistics,” read the announcement. “We believe that adopting modern technologies like blockchain will significantly contribute to improving the business environment and enhancing Dubai’s position as a major centre for global trade.”

The city has been making significant progress in advancing its smart city objectives, leaning on AI, digital assets, and a string of emerging technologies. While the master plan appears to be making steady progress, government officials are investing a fortune in residents’ education to provide talent for the sweeping changes across the emirates.

“This initiative represents a vital step towards a bright and spectacular future for trade and government services, ensuring the emirate’s innovation and global leadership journey continues,” said Dubai Customs Director General Dr. Abdullah Busnad.

Critics poke holes in the offering

Despite the project’s forward-thinking nature, a number of skeptics have argued that a raft of challenges may blight the blockchain initiative. They hinge at the core of their arguments on the scalability issues that typically plague blockchain during periods of a transaction surge.

Given the array of parties involved in custom processes, the specter of interoperability remains lurking in the shadows. Other issues associated with the project include implementation and running costs, potential data breaches, and energy consumption issues.

Watch: Supply chain traceability powered by blockchain tech

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