FOREIGN TRADE UNIVERSITY

FACULTY OF INTERNATIONAL ECONOMICS

---------***--------

MIDTERM ASSIGNMENT
Major: International Economics

OVERVIEW OF BLOCKCHAIN TECHNOLOGY IN

INTERNATIONAL TRADE: IMPLICATIONS FOR
VIETNAM

Group: 7
Class: KTEE216.1
Lecturer: Dr. Nguyen Binh Duong

Hanoi, March 2023

 MEMBER INFORMATION

Name Student ID

Trần Thị Quỳnh Chi 2111410605

Trịnh Nhật Minh 2112450066

Lê Ngọc Hân 2111410048

Lã Hương Ly 2112450053

Nguyễn Quốc Cường 2113450007

Vũ Ngọc Tùng 2112450616

 DECLARATION
We herewith formally declare that we ourselves have written the submitted Midterm
assignment independently. We did not use any outside support except for the quoted
literature and other sources mentioned at the References of this report.

Hanoi, March 2023

Group 7
 ACKNOWLEDGEMENTS
Our group sincerely appreciates all the lectures that Prof. Nguyen Binh Duong gave us!
During the course time and the period we created this essay, you provided us with a wide
range of valuable and interesting knowledge along with a lot of support and dedication
whenever we had difficulties in studying the International Economics I course. For us, it is
our honor and lucky to have a wonderful teacher like you.
We put all our efforts on completing this essay as results of what we gained after the course.
Our essay may have shortcomings but we really hope that you will enjoy this essay and
give us suggestions and comments so that we can be better for the next time.
If we have a chance, we hope that you will accompany us in many subjects in the future.
Thank you so much for everything you taught us! We will keep this knowledge in mind as
long as possible.
Have a great day and stay healthy our dear teacher!
Group 7.

Hanoi, March 2023

 TABLE OF CONTENTS
ABSTRACT ....................................................................................................................... 1

INTRODUCTION ............................................................................................................. 2

1. Reason for choosing this topic .................................................................................... 2

2. Subject and scope of the study .................................................................................... 3

3. Purpose of the study .................................................................................................... 3

4. Research methodology ................................................................................................ 3

5. Structure of the topic ................................................................................................... 3

CHAPTER I. THEORETICAL BACKGROUND OF BLOCKCHAIN

TECHNOLOGY AND INTERNATIONAL TRADE .................................................... 5

1. International Trade ...................................................................................................... 5

1.1 Definition and the history of international trade ................................................... 5

1.2 The benefits of international trade ......................................................................... 6

2. Blockchain technology ................................................................................................ 7

2.1 Definition of Blockchain Technologies ................................................................ 7

2.2 Characteristics of Blockchain Technologies ......................................................... 8

2.3 Types of Blockchain Technologies ....................................................................... 9

CHAPTER II. APPLICATION OF BLOCKCHAIN TECHNOLOGY IN

INTERNATIONAL TRADE .......................................................................................... 10

1. Application of Blockchain in the transactional mechanism ...................................... 10

2. Applications of Blockchain technologies in International logistics .......................... 11

2.1 Smart logistics ..................................................................................................... 11

2.2 Logistic Finance .................................................................................................. 12

2.3 Transportation...................................................................................................... 13

2.4 Logistic Documents ............................................................................................. 13

 3. Applications of Blockchain technologies in International finance ........................... 14

4. Applications of Blockchain technologies in Document management ...................... 15

5. Case study on applications of Blockchain technologies in International Trade ....... 16

5.1 Blockchain in International Trade Logistic: A case study of Trade Lens. .......... 17

5.2 Blockchain in International Trade Finance: A case study of Hongkong and

Shanghai Banking Corporation (HSBC) ................................................................... 18

CHAPTER III. IMPLICATIONS FOR VIETNAM .................................................... 20

1. Opportunities of using Blockchain Technologies in International Trade ................. 20

2. Risks of using Blockchain Technologies in International Trade .............................. 21

3. Policy recommendation ns for the government in using Blockchain Technologies in

International Trade ........................................................................................................ 22

3.1 Promoting interoperability, developing and implementing industry-wide

standards for blockchain technology in international trade....................................... 22

3.2 Developing regulatory frameworks and legal rules for blockchain-based systems
in international trade in order to give legal clarity and reduce cybersecurity threats.22

3.3 Offer assistance and incentives for small and medium-sized enterprises to use
blockchain-based trade platforms and expand their access to capital and credit ...... 23

3.4 Engage in research and development to determine the dangers and possibilities
associated with blockchain technology in international trade ................................... 23

3.5 Provide training programs and support systems to facilitate the shift from
conventional business processes to blockchain-based solutions ............................... 23

CONCLUSION ................................................................................................................ 25

REFERENCES ................................................................................................................ 26
 ABSTRACT

Since its first introduction to the public in 2008 under the form of Bitcoin, blockchain
technology has continued to gain momentum and expand into new areas beyond its initial
use case of cryptocurrency. Many companies and organizations across various industries
are exploring and implementing blockchain solutions to enhance their operations and
improve trust and transparency.. This article uses a qualitative method to provide an
overview of blockchain technology and its applications in international trade, with a
specific focus on Hong Kong's case study. The qualitative approach was chosen to gain an
in-depth understanding of the topic, with data collected from various sources such as
academic journals, news articles, and reports. We then analyze the potential implications
of blockchain technology for Vietnam's international trade, considering both opportunities
and risks and some policy recommendations . As blockchain technology is still in its early
stages of adoption, our analysis serves as a starting point for further exploration and
discussion of the topic.

1
 INTRODUCTION
1. Reason for choosing this topic

In recent years, blockchain technology has gained a lot of attention as a potential game-
changer in various industries, including international trade. This technology offers a secure,
transparent, and decentralized system that can potentially reduce transaction costs and
increase efficiency in global trade.

International trade plays a crucial role in the economic growth of countries. However, it is
often hindered by various challenges such as the lack of transparency, high costs, and
lengthy paperwork. These challenges can lead to delays in the trading process, which can
negatively impact the efficiency and profitability of businesses. Blockchain technology has
emerged as a potential solution to address these challenges.

Blockchain technology could address these challenges by providing a secure and

transparent platform for trade transactions. In addition, blockchain could increase
transparency in trade by allowing parties to track the movement of goods and verify their
authenticity. This could help to reduce fraud and improve trust in international trade.
Furthermore, blockchain-based platforms could provide new opportunities for financing
trade, particularly for small and medium-sized enterprises (SMEs) who may have difficulty
accessing traditional financing.

In Vietnam, the adoption of blockchain technology in international trade could have

significant implications. Vietnam is a major exporter of goods, with exports accounting for
over 90% of the country's GDP. However, Vietnam faces several challenges in international
trade, including inefficient and cumbersome trade procedures, lack of transparency, and
difficulties in accessing finance. While there are still challenges to be overcome, the
potential benefits of blockchain in international trade are clear.

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 2. Subject and scope of the study

The subject of the study on the application of blockchain technology in international trade
is focused on exploring the potential benefits of using blockchain in international trade
transactions. The scope of the study covers the general idea of blockchain technology, the
applications of it in transactional mechanism, logistics, finance and document management
and implications for Vietnam.

3. Purpose of the study

The main aim of this research is to assess the feasibility of implementing blockchain
technology in international trade, particularly in Vietnam. This research will identify and
analyze the current challenges in international trade and examine the features and benefits
of blockchain technology, particularly in the context of international trade in Vietnam.
Therefore, we will evaluate the potential implications of blockchain technology on
international trade and provide recommendations for Vietnam. Overall, this article provides
a comprehensive overview of the potential role of blockchain technology in international
trade and its implications for Vietnam. By leveraging the benefits of blockchain technology,
Vietnam can potentially enhance its trade competitiveness and take advantage of new
opportunities in the global marketplace.

4. Research methodology

In this report we will use qualitative methods. We will do a literature review on the
blockchain technology and its applications from 2008 till recent years. From the results,
some recommendations for Vietnam’s government and companies to utilize this
outstanding technology are mentioned.

5. Structure of the topic

The report includes 3 main chapters:

3
Chapter 1: Theoretical background of Blockchain technology and International trade

Chapter 2: Applications of Blockchain in International Trade and case study

Chapter 3: Implications for Vietnam

4
 CHAPTER I. THEORETICAL BACKGROUND OF BLOCKCHAIN
TECHNOLOGY AND INTERNATIONAL TRADE
1. International Trade
1.1 Definition and the history of international trade

International trade refers to the exchange of goods and services between countries. It
involves the buying and selling of goods and services across international borders. It is an
important part of the global economy and allows countries to specialize in the production
of goods and services that they are relatively more efficient at producing, while importing
goods and services that are more efficiently produced by other countries. International trade
is facilitated by a variety of factors, including lower trade barriers, such as tariffs and
quotas, improved transportation and communication technology, and increased
globalization.

International trade has a long and complex history that dates back to ancient civilizations.
The need for trade arose from the fact that no single region or country had all the resources
and goods necessary for survival or luxury. As a result, people began to exchange goods
and services with each other across borders.

One of the earliest examples of international trade was the Silk Road, which connected
China with the Mediterranean world. The Silk Road was a network of trade routes that
stretched over 4,000 miles, and it allowed the exchange of goods such as silk, spices, and
precious metals. The Silk Road also facilitated the spread of culture and ideas, such as
Buddhism and Christianity.

The 20th century saw the establishment of international organizations and agreements to
regulate and promote international trade. The General Agreement on Tariffs and Trade
(GATT), which was signed in 1947, aimed to reduce trade barriers and promote free trade.
Its successor, the World Trade Organization (WTO), was established in 1995 and has
played a crucial role in promoting international trade.
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Today, international trade is an essential component of the global economy, and it plays a
vital role in the economic growth of nations. The rise of globalization and the increasing
interconnectedness of the world have made international trade more important than ever
before.

1.2 The benefits of international trade

International trade has many benefits that can positively impact economies, businesses, and
consumers. International trade promotes competition by exposing domestic businesses to
foreign competition. This competition can lead to lower prices, improved quality of goods
and services, and greater innovation as companies strive to remain competitive.

Moreover, international trade allows businesses to access new markets and expand their
customer base beyond domestic borders. By expanding into new markets, businesses can
increase their customer base and revenue streams. It can help businesses to diversify their
operations and reduce their dependence on any single market. This can be particularly
important for businesses that operate in industries that are subject to economic or political
volatility in their domestic markets. In addition to expanding their customer base,
businesses can also benefit from lower production costs in other countries. For example, a
business might be able to source raw materials or labor at a lower cost in another country.
This can help the business to lower its overall production costs and potentially increase its
profit margins.

Furthermore, international trade can attract foreign investment, which can lead to economic
growth and job creation. For developing countries in particular, foreign investment can be
a critical source of funding and expertise. These countries may have limited resources to
invest in their own economies, and may struggle to attract the capital they need to drive
growth. By opening up to international trade and foreign investment, these countries can
tap into the resources and expertise of businesses from around the world, helping to create
a more prosperous future for their citizens.
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One of the key benefits of international trade is that it allows countries to specialize in
producing goods and services that they are most efficient at producing. This specialization
can result in a more efficient allocation of resources and increased productivity, leading to
lower costs and higher output. By engaging in international trade and specializing in certain
goods and services, countries can also reduce their reliance on domestic markets, which can
be subject to fluctuations in demand and supply. By diversifying their exports and
expanding their customer base, countries can create a more stable and sustainable economic
environment.

2. Blockchain technology
2.1 Definition of Blockchain Technologies

According to the Bitcoin whitepaper written by Nakamoto in 2008, blockchain technology

is “a distributed ledger technology that enables secure and transparent transactions between
parties without the need for intermediaries". It is based on a distributed database that
enables the creation of a tamper-proof and unchangeable record of transactions that can be
accessed by anyone with the required permissions.
At its core, a blockchain is a chain of blocks that contains information, such as transaction
data, timestamps, and cryptographic hashes, that are secured using cryptography. Each
block contains a hash of the previous block, creating a chain of blocks that cannot be altered
without invalidating the entire chain.

Blockchain is a distributed ledger because it is held by more than one party and each party
can check original information of a blockchain’s entire transaction history (McDaniel &
Norberg, 2019). Whenever a new transaction occurs in a blockchain, it contributes new
information to the system. However, this new information is only added when a majority
of nodes agree upon the history of transactions. Once consensus is reached, the blockchain
ledger is updated across all nodes. This decentralized approach of reaching consensus is
7
different from the traditional centralized system that relies on a third-party to authenticate
transactions, which means that the entity or organization that controls the centralized ledger
has the power to manipulate or alter the information in it.

2.2 Characteristics of Blockchain Technologies

There are several key characteristics that distinguish blockchain technologies from
traditional databases:
- Decentralization: Blockchain technology is decentralized, meaning that there is no
central authority controlling the system. Instead, the network is maintained by a
network of nodes that participate in the validation of transactions.
- Transparency: All transactions on the blockchain are visible to all participants on
the network, and cannot be altered or deleted once they are recorded.
- Immutability: Once a transaction is recorded on the blockchain, it cannot be altered
or deleted. This makes the blockchain an extremely secure and reliable database.
- Security: Blockchain technology uses advanced cryptographic algorithms to secure
transactions and prevent unauthorized access to the network.
- Consensus mechanism: Blockchain technology uses a consensus mechanism to
validate transactions and ensure that all nodes on the network agree on the state of
the blockchain.
- Smart contracts: Smart contracts are self-executing programs that run on the
blockchain and allow for the automation of complex transactions and workflows.
- Tokenization: Blockchain technology allows for the creation of digital tokens that
represent assets, such as cryptocurrencies or real-world assets like real estate or art.
Two typical examples of this trait is Bitcoin and Ethereum, which has revolutionized
the financial world.
- Interoperability: Blockchain technology can be designed to be interoperable,
meaning that it can work with other blockchain networks and traditional systems to
enable seamless transactions and data exchange.

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 2.3 Types of Blockchain Technologies

There are several ways to categorize types of blockchain technologies. In this research, we
divide blockchain technologies into 3 types, depending on how the platform is managed
(Buterin, 2015):
- Public Blockchains: Public blockchains are open to anyone who wants to
participate in the network. One of the most well-known public blockchains is
Bitcoin, which is used for sending and receiving digital currency (BTC). Ethereum
is another popular public blockchain that allows for the creation of decentralized
applications (DApps) and smart contracts.
- Private Blockchains: Private blockchains are designed for use within specific
organizations or groups. They are not open to the public, and only authorized
members can participate in the network. For example, a consortium of banks may
use a private blockchain to share financial data and settle transactions among
themselves, without revealing this data to the public.
- Consortium Blockchains: Consortium blockchains are a hybrid of public and
private blockchains. They are designed for use by a group of organizations that share
a common interest in the network. For example, a group of companies in a supply
chain may use a consortium blockchain to track the movement of goods and share
data about their manufacturing processes and quality control.

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 CHAPTER II. APPLICATION OF BLOCKCHAIN TECHNOLOGY IN
INTERNATIONAL TRADE
1. Application of Blockchain in the transactional mechanism

Foreign trade transactions are typically expensive and range in value from Business-to-
Business (B2B) enterprises, including those involved in operations such as manufacturing,
trading, and services. They have a variety of characteristics relating to the legal system, the
participants, and the transactional mechanism as a result. Within an export import
operation, there are involved: the contracting parties; the product (subject of the
transaction); the payment (counter value of the service). At the same time, a number of
other companies providing the transport (the carrier), the insurance of the goods (the
insurer), the payment of the price (the bank), take part in the operation. The public
authorities in the partner nations, such as the customs authority, chambers of commerce, or
ministries or departments with responsibilities for foreign trade activity, play a significant
role in the transaction's execution. If an export transaction currently involves an elaborate
mechanism, the assimilation of blockchain technology will lead to the simplification of the
transaction mechanism by substituting heavy paperworks with smart, block chain, digital
contracts while retaining the legal reliability nature of physical contracts.

For entities involved in export-import operations, blockchain technology will offer a

number of advantages, such as:
- Real-time document verification: The blockchain enables the verification and
acceptance of financial documents, which cuts down on the time needed to prepare
a delivery of goods.
- Disintermediation: This removes the need for a third party to assume risk and the
correspondent relationships that had been established between the participating
banks in the payment mechanism.
- Decentralize: Decentralizing the contract execution reduces the time needed to
monitor the delivery process because the contract terms are recorded in the
blockchain, the status is updated, and the contract clauses are recorded there.
10
 - Proof of ownership: The blockchain has access to the property title (bill of lading),
ensuring transparency regarding the whereabouts and ownership of the goods.
- Reduction of transaction costs: Smart contracts that are used to execute contract
terms do not require the involvement of correspondent banks.

2. Applications of Blockchain technologies in International logistics

2.1 Smart logistics

Logistics enables the management of the company’s physical flows by including a set of
activities, such as demand forecasting, sales planning, supply requirements, inventory
management, and product distribution. A number of challenges have been created for
logistics as a result of technological advancement and the advent of the fourth industrial
revolution. These can hasten the technological integration of all logistics procedures. As a
result, a brand-new idea known as "smart logistics'' or "logistics 4.0" has emerged. Smart
logistics, in McFarlane's opinion, revolve around effective planning and management
techniques. He affirmed that the level of intelligence is dependent on the applications and
techniques used, starting with product traceability and identification of environmental
elements and continuing through problem detection, solution selection, and automatic
execution. Uckelmann, on the other hand, based his concept of smart logistics on the
concepts of smart product and smart service, which included the use of technology to gather
information on material flow before using it for other purposes like monitoring and
controlling. All supply chains are becoming more effective and efficient thanks to tracking
tools and equipment, with the following changes being observed: Significant end-to-end
visibility, Improvements in product routing, Control and replenishment of inventories and
mobile assets, and detailed management of marketing experience.
Asset tracking tools supported primarily by sensors that provide information in close to
real-time are required for the realization of the aforementioned changes in order to give
businesses clear visibility into product information when acquiring, stocking, producing,
and shipping.

11
For a number of reasons, including ensuring the organization's internal and external
communication (with stakeholders), generating control and decision-making data,
gathering enormous amounts of data for forecasting, and categorizing feedback,
information flows are important in logistics and the supply chain. Because of the value of
this data, businesses choose management strategies that provide a higher level of security
and dependability. At the moment, blockchain technology enables smart logistics to track
all information flows more securely. The use of blockchain in information clusters entails
tracking digital assets (like warranties, certifications, licenses, serial numbers, and
barcodes) simultaneously and in parallel with physical assets, as well as tracking orders,
receipts, invoices, payments, and other official documents. These programs are used in
numerous projects, including the joint venture between Microsoft and Mojix. Both
businesses want to avoid situations where speculation results in false information about
demand and damages the supply chain as a whole by minimizing the differences between
databases built by supply chain stakeholders. Given the number of parties involved in the
supply chain, transparency is also advantageous because it gives end users and customers
new management options.

2.2 Logistic Finance

The first Blockchain was used in finance as the foundation for the Bitcoin digital currency.
The latter employs peer-to-peer (P2P) technology and runs independently of any centralized
services like banks, commissioned accountants (CA), notaries, or other financial
institutions. In general, cryptocurrency aims for the finalization of payments in the absence
of intermediate actors, as well as the minimization of the absence of the charges of
movement of the funds as the transaction is direct. Online payments and remittances are
just a couple of the financial services that the Blockchain can be used for. These services
have an impact on product management, supply chain operations, and network-wide
financial exchanges. Additionally, they will streamline business operations by removing
currency restrictions, such as currency transfer fees, and lowering the likelihood that
macroeconomic factors will affect the exchange rate. This will entice customers and
12
increase their demand for goods and services. An unity of payment currency therefore, will
enhance the international logistics process.

2.3 Transportation

Blockchain technology has a wide range of uses in the transportation industry. The
implementation of a technique like blockchain, in which information is consistent among
partners, will improve the system as the principle of transportation depends greatly on the
mutual trust between partners and involves extensive paperwork for confirmation as well
as assurance in the process. Walmart, a supermarket retailer, recently received a patent that
will allow it to connect delivery drones to the Blockchain to enhance last-mile logistics.
This innovation is applicable to every agent, activity, and piece of machinery used in the
final supply chain segments. Increased sustainability, decreased fraud, decreased
paperwork delays, decreased waste, and quicker problem identification are all benefits of
integrating the Blockchain into shipping and sea transport. As a result, this might raise the
total volume of trade by 15% and the global GDP by almost 5%. Additionally, according
to data found on DHL's official web pages, up to 10% of bills of lading have inaccurate
information that may give rise to legal action. Blockchain technology may be crucial in
addressing these issues and streamlining logistics procedures.
2.4 Logistic Documents

Integration of blockchain technology into smart logistics enables process improvement,

which benefits management and makes chains even more agile. Additionally, managers
have clear visibility into the status of the overall processes' operations thanks to data
collection and transmission in close to real-time, which enables them to take prompt
decisions based on reliable information. Kshetri, for instance, uses a multiple case study
approach to investigate how the blockchain affects various supply chain management goals.
In addition, Saberi investigates the major challenges to implementing blockchains,
particularly smart contracts, to meet the goals of sustainable supply chain management. An
example of a blockchain application for IoT systems is the distribution of messages among
13
devices in a chain where each message is treated similarly to a transaction. Smart contracts
are rules that are stored on blocks that can be used to arrange financial agreements, make
sure there are enough funds for projects, and guarantee that everyone gets paid on time.
Continuous process improvement and network data sharing between supply chain
participants are influenced by smart contracts. As a result, they enable secure and quick
transactions between various currencies or currency mixtures from various sources in the
global supply chain.

3. Applications of Blockchain technologies in International finance

Blockchain technology has the potential to transform the international finance industry by
providing secure, transparent, and efficient solutions for cross-border payments, trade
finance, digital identity verification, smart contracts, and regulatory compliance (Swan &
Lau, 2015; Zheng et al., 2018; Haffar et al., 2019; DuPont et al., 2018; Sorge & Tonetti,
2018). These applications can help reduce transaction costs, increase speed and
transparency, eliminate intermediaries, reduce the risk of fraud, improve the efficiency of
financial transactions, increase security, and improve regulatory compliance (Swan & Lau,
2015; Zheng et al., 2018; Haffar et al., 2019; DuPont et al., 2018; Sorge & Tonetti, 2018).

One potential application of blockchain technology in international finance is cross-border

payments. Swan and Lau (2015) found that blockchain-based payment systems can
transform the cross-border payments industry by reducing transaction costs, increasing
speed and transparency, and eliminating intermediaries. Similarly, a study by Zheng et al.
(2018) showed that blockchain-based trade finance systems can reduce the risk of fraud,
increase transparency, and improve the efficiency of trade finance transactions. In addition,
blockchain technology can provide secure and decentralized digital identity verification,
which can be useful for international finance transactions (Haffar et al., 2019). Blockchain-
based identity verification systems can reduce the risk of identity theft, increase security,
and improve the efficiency of identity verification processes.

14
Another potential application of blockchain technology in international finance is the
creation of smart contracts. DuPont et al. (2018) found that blockchain-based smart
contracts can automate and streamline complex financial transactions, reduce costs, and
increase efficiency. In addition, blockchain technology can provide a secure and transparent
record of financial transactions, which can be useful for regulatory compliance (Sorge &
Tonetti, 2018). Blockchain-based regulatory compliance systems can reduce the risk of
non-compliance, increase transparency, and enable more efficient regulatory oversight.

However, there are still challenges to overcome in order to fully realize the potential of
blockchain technology in international finance. These challenges include scalability,
interoperability, and regulatory clarity (Swan & Lau, 2015; Zheng et al., 2018; Haffar et
al., 2019; DuPont et al., 2018; Sorge & Tonetti, 2018). Further research is needed to address
these challenges and develop blockchain-based solutions that can meet the needs of the
international finance industry.

4. Applications of Blockchain technologies in Document management

When it comes to document storage, sharing, and verification, blockchain technology is

quickly becoming the go-to option because to its security, transparency, and trustworthiness
(Dinh et al., 2018; Jang et al., 2020; Li et al., 2019). The use of these programs has been
shown to lessen the possibility of fraud, boost productivity, strengthen security, and build
confidence in document management procedures (Dinh et al., 2018; Jang et al., 2020; Li et
al., 2019).

Blockchain technology has the potential to improve document management through

applications like secure document storage. Data loss, hacking, and other security breaches
may be avoided with blockchain-based document storage solutions, which offer a
decentralized and tamper-proof method of document storage (Dinh et al., 2018; Jang et al.,
2020). Moreover, blockchain technology can be used for compliance and regulatory

15
applications due to its ability to give a transparent and auditable record of document access
and modification (Li et al., 2019).

Blockchain technology may also find use in document sharing, another aspect of document
management. Systems based on the blockchain can facilitate the secure and decentralized
transfer of documents between many parties (Dinh et al., 2018; Jang et al., 2020). In
addition to guaranteeing that only authorized parties have access to the papers, this can also
speed up the process of document sharing (Li et al., 2019).

At long last, blockchain technology may be used to confirm the authenticity of paperwork.
Without the need for third-party verification services, blockchain-based document
verification systems can ensure the validity and integrity of documents in a secure and
transparent manner (Dinh et al., 2018; Jang et al., 2020). As a result, only legitimate
documents will be accepted in document management procedures, decreasing the
likelihood of fraud (Li et al., 2019).

The potential of blockchain technology in document management has yet to be completely

realized, though. Scalability, privacy, and meeting applicable regulations are all obstacles
(Dinh et al., 2018; Jang et al., 2020; Li et al., 2019). Further study is needed to figure out
how to overcome these obstacles and create blockchain-based solutions that can fulfill the
requirements of the document management sector.
5. Case study on applications of Blockchain technologies in International Trade

The Blockchain Technologies have been applied in a myriad of fields, not only
International Trade. For example, Blockchain smart contracts are comparable to standard
contracts, but they eliminate the middleman and offer degrees of responsibility for all
parties involved that aren't achievable with conventional agreements. The terms of the
contract are enforced in real-time on a blockchain. This ensures compliance from all parties
involved while also saving businesses time and money. Or the case of Blockchain
16
utilization in Healthcare appeared in Medicalchain, a healthtech platform that allows a
simpler and more secure information flow. Doctors no longer need to wait for insurance
information thanks to Medicalchain as the blockchain technology can automatically check
if a patient is covered by insurance. A blockchain-based portal that safely displays patient
medical information and finds top prospects for various trials may also be used to quickly
discover top candidates for medication and clinical trials.

All of the above-mentioned applications, but the operation of Blockchain technologies used
in International Trade is somewhat “stand out”. There are empirical evidence on the
functionality of Blockchain in worldwide commerce, namely the two cases bellow.

5.1 Blockchain in International Trade Logistic: A case study of Trade Lens.

Overview: In 2018, IBM and Maersk founded TradeLens, a joint blockchain logistic
solution that enables organizations or groups to effectively share data and track
transactions. Blockchain technology serves as the foundation of TradeLens, an open and
impartial supply chain network. They facilitate genuine information exchange and
cooperation across supply chains, which will boost market innovation, ease trade tensions,
and eventually encourage greater international commerce.

How it works: Since the ship arrived at the port, the blockchain technology will allow access
to content and recipient information. As a result, the usage of Blockchain Technologies
lead to swift and protected international commercial transaction.

Two specific products are provided by the Tradelens, specifically Tradelens core and
TradeLens eBL. Tradelens core focused on the potential of enabling information sharing
and partnership across a worldwide extremely divided industry. On the other side,
TradeLens eBL helps reduce operation costs by using digital bill of lading. Overall, the
Blockchain technologies are applied thoroughly, from the input information stage to

17
logistic, and then arrive at the point when all documents are saved to the TradeLens
Blockchain.

Benefits of using Blockchain specifically in TradeLens:

- Enhance security and transparency. By utilizing a TradeLens eBL that is
immediately accessible to all stakeholders, with blockchain-secured
versioning, and a transparent audit trail, you can eliminate the danger of lost
documents, forgeries, delays, and costs.
- Streamline your process. TradeLens together with the application of
Blockchain technology will enables you to issue, transfer, and surrender
digitally through API, will increase efficiency and guarantee that business
needs are satisfied.
- Reduce cost. Employing Blockchain Technologies enables you to exchange
the entire shipping document sets between permissioned parties, reducing the
cost and time of printing and couriering papers.
- Access to a digital ecosystem. Instead of the laborious, manual, paper-based
procedure of managing an original Bill of Lading, Blockchain helps serve the
same purpose digitally and has widespread ocean carrier support.

5.2 Blockchain in International Trade Finance: A case study of Hongkong

and Shanghai Banking Corporation (HSBC)

Overview: Hongkong and Shanghai Banking Corporation (HSBC) is one of the world's top
financial and banking institutions. It has offered the first finance for a blockchain-based
export enterprise. The technology makes it possible to tokenize both the digital bond and
the settlement currency, enabling atomic settlement or delivery instead of payment (DvP).
The digital bond proposal employs a permissioned blockchain technology rather than
bitcoin.

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How it works: Cargil started the deal, which was intended to ship soy from Argentina to
Malaysia. Participants in the transaction have used a platform created by the R3 consortium
Corda Blockchain, which is based on innovative technologies. With blockchain technology,
the transaction's execution only needed to take place for 24 hours instead of the customary
5 to 10 days.

Benefits of using Blockchain specifically in the case of Hongkong and Shanghai Banking
Corporation (HSBC):
- Strong ecosystem. Hongkong and Shanghai Banking Corporation (HSBC)
is a part of eTradeConnect, the first trade financing platform in Hong Kong
to use blockchain technology. With 12 banks using the platform,
eTradeConnect has developed a robust ecosystem in addition to connections
with other helpful partners including a blockchain platform located in
mainland China and an international shipping consortia.
- Standardizing private placement information. HSBC utilize a series of
blockchain-based digital vault which grants international customers access to
their detailed private assets. The assets varies from equity, bond, treasury,
debt, real estate,... directly in real time, instead of going through complicated
paper-based procedures.
- Streamlining payment settlement. By tying together ecosystems based on
blockchain so that transactions may be made in numerous currencies almost
instantly, around-the-clock, HSBC's On-Chain Payment solution accelerates
payment procedures for many parties. As a first for both HSBC and
Singapore, HSBC successfully carried out the cash settlement in a prototype
digital bond issue using this system.

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 CHAPTER III. IMPLICATIONS FOR VIETNAM
1. Opportunities of using Blockchain Technologies in International Trade

Transparency and traceability improvements are one of the most significant advantages of
blockchain technology for international trade. It is feasible to trace the movement and origin
of products and services across the supply chain using blockchain technology. This can
prevent fraud and boost trade process efficiency. Blockchain can offer Vietnam, which
relies largely on exports, with a competitive edge by boosting transparency in its supply
chain and enhancing export security.

In international trade, blockchain technology also offers the promise for lower transaction
costs and accelerated trade processing. Blockchain technology can eliminate the need for
middlemen in the trading process, hence reducing transaction costs and enhancing
efficiency. It can also accelerate the trading process by offering a transparent and secure
platform for trade documents and payments.

Using blockchain-based platforms, blockchain technology can help expand access to

financing and credit for small and medium-sized firms (SMEs). There is a big possibility
for economic growth for Vietnam, which has a large share of small and medium-sized
enterprises. Blockchain-based trade finance can enable novel and inventive means of
gaining access to financing and mitigating risk, hence promoting economic growth and job
creation.

Enhanced supply chain resiliency and diminished supply chain risk are a further
opportunity for blockchain technology in international trade. It is feasible to verify the
authenticity of items and limit the danger of counterfeit goods entering international
marketplaces using blockchain technology. This can increase confidence and security in
international trade.

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Lastly, blockchain technology can improve market competitiveness in international trade.
By offering a decentralized trading platform, new market entrants may compete with
established firms, resulting in more competition and perhaps reduced prices for consumers.

2. Risks of using Blockchain Technologies in International Trade

Lack of standardization and probable interoperability concerns across different blockchain

platforms is one of the major hazards of blockchain technology in international trade. This
might limit adoption and lead to fragmented, incompatible systems that are unable to
interact with one another.

Cybersecurity is an additional important concern linked with the usage of blockchain

technology in international trade. Putting sensitive trade information on a distributed ledger
can make it susceptible to cyberattacks, which might pose considerable economic and
security implications. To protect against these threats, it is crucial to establish strong
cybersecurity processes.

Legal and regulatory issues also pose a substantial threat to the use of blockchain-based
systems in international commerce. Confusion over legal frameworks and regulatory
requirements can result in adoption delays and opposition, particularly in nations with
complicated regulatory regimes, such as Vietnam.

Another possible danger of blockchain technology in international commerce is the

difficulty of moving from old trading methods to a system based on the blockchain. It is
necessary to educate stakeholders on the benefits and hazards of blockchain technology and
to create transitional support systems and training programs.

Lastly, the use of blockchain technology in international commerce might eliminate

employment in businesses associated with traditional trade methods. It is crucial to explore
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legislation to assist employees and sectors that may be adversely affected by blockchain
disruption.

3. Policy recommendation ns for the government in using Blockchain

Technologies in International Trade
3.1 Promoting interoperability, developing and implementing industry-wide
standards for blockchain technology in international trade.

The creation of industry-wide standards for blockchain technology is essential for

promoting interoperability. These standards should guarantee that various blockchain
systems can communicate with one another and that the use of blockchain in the industry
is consistent. The International Chamber of Commerce (ICC) has created rules that provide
a consistent framework for the use of blockchain technology in international trade.
Governments and industry stakeholders must collaborate to encourage the implementation
of these principles and other standards.

3.2 Developing regulatory frameworks and legal rules for blockchain-based

systems in international trade in order to give legal clarity and reduce
cybersecurity threats.

Lack of legal clarity and regulatory frameworks might limit blockchain technology's
adoption. Governments should build technology-neutral regulatory frameworks that give
legal certainty for blockchain-based international commerce systems. These frameworks
should also address the cybersecurity threats posed by the storage of sensitive trade data on
a distributed ledger. The General Data Protection Regulation (GDPR) of the European
Union (EU) gives an example of a legislative framework for the protection of personal data
and can serve as a model for comparable rules in other nations.

22
 3.3 Offer assistance and incentives for small and medium-sized enterprises
to use blockchain-based trade platforms and expand their access to capital and
credit

SMEs frequently encounter obstacles in gaining access to capital and credit, which can
impede their involvement in international commerce. Blockchain-based trade finance can
give innovative and novel means for SMBs to have access to financing and risk
management. Governments can give assistance and incentives to encourage SMBs to utilize
blockchain-based trade platforms, such as decreased regulatory requirements and tax
benefits. In addition, they may collaborate with banks and other financial institutions to
provide funding for SMBs through blockchain-based trade finance.

3.4 Engage in research and development to determine the dangers and

possibilities associated with blockchain technology in international trade

Governments should engage in research and development to identify hazards and

possibilities associated with blockchain technology in international commerce. This can
guarantee that politicians have a greater grasp of the technology and are able to establish
appropriate regulations to facilitate its adoption. Governments might also sponsor pilot
programs to investigate the potential advantages and hazards of blockchain technology in
various areas of international commerce.

3.5 Provide training programs and support systems to facilitate the shift
from conventional business processes to blockchain-based solutions

The move from traditional trade procedures to blockchain-based systems can be difficult
for enterprises, government organizations, and private individuals. Governments should
provide training and assistance programs to facilitate this transition. These can include
training programs and workshops that help businesses understand the benefits and hazards

23
of blockchain technology, as well as technical assistance to assist them in implementing
blockchain-based trading platforms.

24
 CONCLUSION

The application of Blockchain technology in International Trade is a topic of interest and

research for many scholars around the world, including Vietnam. There have been many
qualitative and quantitative studies on this topic. Currently, many countries in Asia, as well
as Europe, are the leading countries in the usage of Blockchain technology. Through
international research on the case studies of many corporations, namely TradeLens, and
HSBC, … this report clarifies the concepts of Blockchain technology: How it works, what
types, its characteristics and its application into International transaction mechanisms,
International logistics, International finance, and document management.

The report indicates the implications for Vietnam in the utilization of Blockchain
technologies in International Trading, including opportunities, risks, and policy
recommendations for the government. Therefore, this report recommend we 1) Promoting
interoperability, developing and implementing industry-wide standards for blockchain
technology in international trade; 2) Developing regulatory frameworks and legal rules for
blockchain-based systems in international trade in order to give legal clarity and reduce
cybersecurity threats; 3) Offer assistance and incentives for small and medium-sized
enterprises to use blockchain-based trade platforms and expand their access to capital and
credit; 4) Engage in research and development to determine the dangers and possibilities
associated with blockchain technology in international trade; 5) Provide training programs
and support systems to facilitate the shift from conventional business processes to
blockchain-based solutions.

25
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