Implementation of blockchain letter of credit and its general impact on logistics and trade supply chain

Abstract

Our world is now a Global Village with global trade, business and corporate networks, relationships, agreements. From the beginning of business and commercial Trade; trade and supply of goods around the world was affected by change in different process, policies, rules and regulations, protocols, agreements, relationships, embargo and sanctions which made the free trade limited and disruptive sometimes. Certain challenges were also faced considering the interaction of external environments and situations including the environment, politics, economy, socio economic issues and cause of unprecedented situations including pandemic or calamities. The use of technology has paved the way for the inclusion of the Blockchain in the Supply Chain of global and commercial cross border Trade which has made the process automated (removing the manual documentations) more effective, efficient and decentralized by adding operational efficiency, information and goods, money security, funds, payments availability (Supply finance) and saving logistics time and costs untangling the hurdles. The performance of contract and agreement can be encrypted and validated also by the step by step authenticated networking process. Moreover, inclusion and participation of 3rd party vendors, suppliers and platform distributors has also affected the trade and Letter of credit contract manifold. Nevertheless, there are limitations of any technological implementation, incorporation likewise blockchain in financial, scarcity, infrastructural and socio economic aspects. Considering all odds like many countries the blockchain has recently been implemented in Bangladesh by SCB, HSBC in commercial consortium LC based Trade supply chain creating an important milestone and paradigm shift in the long history of commercial trade in Bangladesh. This report has be furnished identifying the key features, design, process, aspects of blockchain archetype and overall diverse effect of incorporation of blockchain in the logistics and supply chain of commercial trade functionalities.