Product Origin Verification Without Intermediaries Becomes an Important Use Case for Blockchain Technology in the Context of Increasing Trade Tensions.
Escalating trade tensions are causing shockwaves in the cryptocurrency market, but simultaneously creating new application cases for blockchain technology, according to Truebit leaders' sharing with Cointelegraph.
On April 2, President Donald Trump announced a comprehensive tariff plan for imports to the US, prompting many countries to threaten retaliation. Although Trump later temporarily suspended trade tariffs with some countries, the risk of global trade war remains present, especially after he reaffirmed his commitment to taxing Chinese goods.
Blockchain Ensures Transparency in Supply Chain
According to Truebit leaders, if high tariffs are applied, blockchain technology can play a crucial role in ensuring governments apply them fairly. "Blockchain can truly help prove product origin and product monitoring chain," Federico Kattan, Truebit's Technology Director, shared with Cointelegraph.
For example, a company could "assemble or package in a country with low tax rates and import to the US with a 10% tariff instead of 58%... but blockchain can help determine where the product actually originated," Kattan said.
Blockchain networks can enhance supply chain transparency by recording all transactions on an immutable public ledger, significantly limiting fraud potential in trillions of dollars of import value.
Trump's proposed trade tariffs will affect 2.4 trillion dollars of import value, according to the Tax Foundation report. Retaliatory measures from other countries could increase this number.
Truebit is a blockchain network specialized in helping users add trustless verification to various applications. The company is negotiating with software providers serving the US government and participating in an EU-sponsored project exploring Web3's potential role in global supply chains.
"We haven't directly spoken with the government, but are working with software providers trying to connect with them – because that's the position we want to move towards," Jason Teutsch, Truebit's CEO, said.
However, some cryptocurrency industry leaders warn that tariffs pose serious risks to blockchain network integrity and user accessibility, potentially disrupting physical infrastructure, fragmenting regulatory regimes, and censoring users.
