In a significant step towards modernizing its trade framework, the Mongolia National Chamber of Commerce and Industry (MNCCI) has launched an initiative to employ Blockchain and Distributed Ledger Technology (DLT) for issuing Certificates of Origin (COOs). This groundbreaking effort aims to streamline operations under various trade agreements, including the Generalized System of Preferences for 37 countries, the Asia-Pacific Trade Agreement (APTA) for six countries, and the Mongolia-Japan Economic Partnership Agreement (EPA).
Traditionally, the process of verifying the authenticity of COOs has been fraught with inefficiencies. Businesses often face inconsistencies, necessitating direct verification with the MNCCI. This process not only incurs additional costs and delays but also undermines the benefits of preferential trade arrangements and increases the risk of fraud.
In response to these challenges, the MNCCI, with the support of the Asian Development Bank’s (ADB) Digital Learning Labs and in collaboration with ADB’s East Asia Department (EARD), initiated an exploration into blockchain technology. The project required an innovative solution that ensured security, efficiency, and scalability. Morpheus.Network, a firm well-known for its expertise in blockchain services, was selected as the partner for this initiative. Between April and November 2023, Morpheus.Network developed a Minimum Viable Product (MVP) that digitizes, tracks, and manages the digital footprints of COOs on the blockchain. This innovative approach aims to eliminate the inefficiencies associated with paper-based systems by providing an immutable record of authenticity, thereby enhancing security and trust among all stakeholders.
Implementation and Integration of Blockchain Technology
The blockchain solution, branded as “Trust Powered by Blockchain,” integrates seamlessly with MNCCI’s existing systems, ensuring a smooth transition with minimal operational disruption. Despite the inherent complexities of integrating advanced technology into established infrastructures, Morpheus.Network successfully delivered the project within the stipulated timeframe and budget. Their adept problem-solving skills, responsiveness to MNCCI and ADB requirements, and ability to navigate challenges were particularly noteworthy.
This blockchain initiative is expected to bring several benefits. By providing a digital record that is immutable and easily accessible, the solution enhances the transparency and reliability of COOs. This reduces the likelihood of fraud and errors, thereby boosting confidence among international trade partners. Furthermore, the efficiency gained from digitizing COOs can lead to faster processing times and lower costs, making Mongolia’s trade operations more competitive on the global stage.
Future Prospects and International Collaboration
Looking to the future, MNCCI is eager to expand this blockchain solution through partnerships with international donor organizations. This expansion underscores MNCCI’s commitment to leveraging cutting-edge technology for enhanced transparency and efficiency in international trade. By collaborating with global partners, MNCCI aims to further improve its trade processes and ensure that Mongolia remains at the forefront of digital innovation in the trade sector.
The successful implementation of this blockchain project serves as a model for other countries and trade organizations looking to modernize their own systems. It demonstrates the potential of blockchain technology to transform traditional trade processes, making them more secure, efficient, and transparent.
In conclusion, the MNCCI’s adoption of blockchain for issuing Certificates of Origin marks a significant advancement in Mongolia’s trade framework. By addressing the inefficiencies and risks associated with traditional COO verification processes, this initiative promises to enhance the country’s trade operations, foster international trust, and pave the way for future technological innovations in the trade industry.