The UK has recently passed the Electronic Trade Documents Act 2023, which officially became law on July 20th and is set to take effect this autumn. This act is technology neutral and will allow the use of blockchain technology if it meets the reliability test, according to a government spokesperson. The Law Commission for England and Wales, the independent statutory body that drafted the bill, estimates that billions of papers are passed around annually with global shipments, as this is the only way they can be transported.
The act’s significance “is that it allows electronic documents to be treated as legally analogous to paper if they meet certain criteria, said Law Commissioner Sarah Green. Blockchain technology happens to be one of the means by which such documents can meet those criteria. The government press release on the act also stated that electronic trade documents increase security and compliance by making it easier to trace records, such as through the use of blockchain and distributed ledger technology.
James Butterfill, head of research at CoinShares, believes this is a step forward for the UK. Utilizing blockchain technology to distribute trade documents digitally could improve workflow and efficiency, reduce costs, and ensure compliance in the long run.