On Wednesday, the UK government introduced the Electronic Business Documents Bill. The technology-independent bill gives legal status to commercial documents such as electronic bills of lading (eBLs), digital warehouse receipts and digital cargo insurance certificates. These documents are increasingly used by blockchain trade finance platforms such as Contour and komgo.

The legislation had its first of five readings in the House of Lords. After that, it will advance to the House of Commons.

The succinct legislation is not about contracts, but about the ability to prove ownership of goods, particularly those in transit. For example, a bill of lading dictates who owns the contents of a container. Many of the documents, particularly bills of lading, are essential for certain types of trade financing, such as letters of credit.

“The UK was instrumental in establishing the international trading system in the 19th century and once again we are leading the world in driving global trade in the 21st century,” Digital Secretary Michelle Donelan said.

Despite the pandemic speeding up digitization, last year only 1.2% of bills of lading were digital, according to the International Chamber of Commerce (ICC). Another blockchain platform, Marco Polo, spearheaded a project that led to the ICC’s Digital Standards Initiative (DSI), which covers similar issues to the UK bill to ensure global interoperability.

For eBL, DSI recommends the standard developed by the Digital Container Shipping Association, which in 2020 predicted that digitizing bills of lading could save $4 billion annually if 50% of the market adopts it. IATA introduced Air Waybills in 2010, which took ten years to reach 68% adoption.

Numerous blockchain projects target trade and trade finance. Examples on the trade front include IBM and Maersk’s TradeLens, GSBN, CargoX and WaveBL.