The study examines the market readiness and potential impacts of eight promising use cases for blockchain technology in supply chains and international trade: decentralised marketplaces, letters of credit, cross-border payment systems, maritime insurance, supply chain management, e-certificates of origin, proof of authenticity for luxury products and ethical sourcing for the food industry.

The potential impacts of the use cases were considered from trade, economic, transparency, security, data protection, social and environmental perspectives. Overall, they are expected to contribute to the facilitation of trade through a combination of digitalisation, information exchange and automation. This could result in cost reductions and increased transparency.

Security is considered strong overall, although standards, certification and audit procedures would help to ensure quality and compliance. The use of blockchain technology might also facilitate small and medium-sized enterprises to access trade and trade finance and help consumers to access product information, potentially enabling more ethical and environmentally responsible choices.

Regarding readiness for market, each use case achieved a minimum level of credibility in the form of a technical proof of concept, a larger pilot study or, in some cases, early commercial solutions. There are no major technical barriers to the use of some types of blockchain solution for some elements of trade.

However, many of the benefits described in the study derive not from blockchain per se, but from the digitalisation of trade processes that are currently conducted in large part offline. There are several barriers to this digitalisation and blockchain presents only a partial solution to some of them, notably the provision of a secure infrastructure for digital exchanges that embeds trust and collaboration. They do not provide a complete solution for all aspects of trade and its digitalisation.

One substantial barrier to digitalisation remains in the willingness of the ensemble of trade actors to change. Blockchain itself also introduces some barriers including data localisation and privacy issues, identification of the applicable law, allocation of liability, legal recognition of blockchain-based information, and interoperability and standardisation across various economic operators and regulatory frameworks.

Despite efforts to digitalise supply chains and trade processes, the transition to electronic document exchange and data processing remains incomplete. Blockchain technology may offer a partial solution to some of the barriers, and several actors at EU and international level as well as the private sector are exploring the opportunities. To take things further, policy-driven action may be needed, including adaptations to the legislative framework.

It also agreed with EBA Opinion 2014/08 which suggests refraining from using the term ‘virtual currencies’ because using the term ‘currency’ can be misleading for a variety of reasons.

The EP also took note of the remarks made by Christine Lagarde in the meeting of the Committee on Economic Affairs of 4 September 2019 on the subject of the new regulation of cryptoassets to the effect that:

"The ECB and central banks in general should clearly monitor these developments and contribute to ongoing international work on policy responses".

Further, it asked the ECB, in collaboration with the European Commission, to assess the EU legal and regulatory framework on e-money, financial instruments and virtual assets in order to have a comprehensive framework for the supervision of financial instruments, entities or infrastructures, for anti-money laundering and stability purposes, as well as for cross-border co-operation and co-ordination.

It also asked the ECB to work with the Commission on creating a framework for these new currencies that reconciles innovation, citizens’ needs, the preservation of financial stability and the rule of law.