International Trade and the Blockchain

The blockchain promises to transform how a wide array of services, transactions, and business processes are conducted.  As the blockchain is used to implement these types of solutions on a global level, it will increasingly come into conflict with national laws and regulations that affect the provision of goods and services.  These types of laws and regulations could include:

  • Standards imposed by national regulatory authorities that affect blockchain solutions.  These could be standards imposed upon service providers (e.g., financial institutions), standards imposed upon certain types of transactions (e.g., payment transactions), or technical standards imposed upon the technologies that make the blockchain possible (e.g., standards imposed upon computers and networks).
  • National data localization requirements that affect where and how certain types of data, such as financial records, may be stored.  The globally distributed nature of the blockchain poses a fundamental challenge to notions of data localization.
  • National restrictions on cross-border data transfers.  As with data localization requirements, the distributed nature of the blockchain may in some cases conflict with national laws and regulations that restrict the cross-border movement of certain types of data. 

The existing network of international agreements that governs trade in goods and services may in some cases provide a means of addressing these obstacles.  Equally important, new international agreements such as the Trans-Pacific Partnership (TPP) and the Trade in Services Agreement (TISA) include updated and more expansive provisions relating to the domestic regulation of services, and these provisions may be better suited to technologies such as the blockchain.  Companies implementing blockchain solutions must understand how international trade agreements, including existing trade agreements and those under negotiation, will affect the implementation of their solution at the international level.

As one of the world's leading international trade law firms, Steptoe is uniquely positioned to advise companies on how international trade agreements affect the blockchain.  Steptoe is one of only two law firms in the world ranked by Chambers & Partners as a "Band 1" firm in the area of international trade.  Steptoe's international trade lawyers are among the world's most recognized practitioners in the agreements of the World Trade Organization (WTO) and in the negotiation of new international trade agreements.  Of particular relevance to the blockchain, Steptoe has extensive experience advising clients in matters relating to international trade in services, including matters arising under the WTO's General Agreement on Trade in Services (GATS).  Steptoe successfully litigated the only two WTO disputes to date that have addressed issues relating to international trade in financial services, and its lawyers have a strong familiarity with both the technologies and the international regulatory issues affecting trade in financial services.

Steptoe's international trade team can help clients in the blockchain space:

  • Understand the implications of existing international trade agreements for the implementation of blockchain solutions on a cross-border basis
  • Monitor ongoing international trade negotiations that may affect the blockchain, such as the ongoing TISA negotiations
  • Analyze national laws and regulations for their consistency with international trade agreements, including proposed laws and regulations that may affect the blockchain
  • Work with the Office of the United States Trade Representative (USTR), the European Commission, the WTO, and other national and international organizations to address issues relating to the implementation of blockchain solutions

For more resources about the blockchain and to learn more about our Blockchain Team, please visit Steptoe’s Blockchain Team site.