UK to introduce legislation conferring legality on digital documents on blockchain

Getting your Trinity Audio player ready...

The United Kingdom Parliament has introduced a new bill that bestows legal status on paperless documentation used in international trade. The Electronic Trade Documents Bill seeks to encourage the adoption of digital documents similar to electronic lading and digital cargo insurance certificates.

Most of these digital certificates are based on blockchain technology, with platforms like Contour and Komgo leading the way. Other platforms looking to use blockchain in trade finance include GSBN, CargoX, and TradeLens, a platform jointly developed by IBM and Maersk.

The proposed legislation aims to reduce administrative costs and bureaucracies associated with paperwork. The filed regulation will also modernize the Bill of Exchange Act of 1882 and the Carriage of Goods by Sea Act of 1992, which will usher in a range of benefits for stakeholders in the field.

Right out of the gate, experts say that going digital with trade documents could save the U.K. nearly $1 billion in 10 years and reduce processing times from two weeks to a mere 20 seconds. Furthermore, the Digital Container Shipping Association predicts that using electronic bills for lading will save a staggering $4 billion globally if half of the shipping industry embraces digitization.

“Our digital-first plans will make it easier for the country’s firms to buy and sell around the world—driving growth, supercharging our economy, cutting carbon, and boosting productivity,” said Digital Secretary Michelle Donelan. “The U.K. was central to establishing the international trade system in the nineteenth century, and we are once again leading the world to boost global trade in the twenty-first century.”

The bill was read in the House of Lords five times and will make its way to the House of Commons for another round of parliamentary deliberations. The latest proposed regulation was developed by the country’s Law Commission and stemmed from the Group of Seven commitment to foster increased digitization in the country.

The UK tango with digital assets

The U.K. has endured a see-saw relationship with virtual currencies over the last few years characterized by the unceremonious exit of Binance from the country and the crackdown on advertisements from digital asset service providers by its advertising regulator.

However, there appears to be a ray of light at the end of the tunnel with the Queen’s speech to Parliament back in May. The content of the address, while offering a soft landing for service providers, also gave broad powers to regulators to rein the industry and prevent misuse of the asset class.

“A bill will be brought forward to further strengthen powers to tackle illicit finance, reduce economic crime and help businesses grow,” read the speech. “Measures will be introduced to support the security services and help them protect the United Kingdom.”

While the digital asset enthusiast may be proceeding with trepidation, blockchain proponents can rest easy knowing that they have the full backing of regulators.

Watch: The BSV Global Blockchain Convention presentation, Elas: Creating private, permissioned ledgers on the public blockchain