Distributed Ledger Technology (DLT): a type of database that stores data across a network of computers rather than on a single server. DLT ensures there is no single person or group with control – instead, all users collectively retain control.
Blockchain: a type of DLT that stores data in “blocks” linked together in a “chain.” For each new transaction, information is verified and encrypted into a “block” that is added to the end of the chain, creating a permanent, immutable history of all transactions.
Interoperability: the ability of different computer systems and software to communicate with each other.
Interoperability standards: detailed descriptions, or blueprints, that guide software development and enable different systems to connect and exchange data.
Decentralized Identifier (DID): a globally unique identifier for companies, people, and products with a secure, encrypted key that prevents people from stealing it.
Verifiable Credential (VC): a tamper-proof, digital vehicle in which data is received to allow systems to verify authenticity and validate legitimacy of the company and product being imported.
Digital Twin: a virtual representation of an object or system designed to reflect a physical object accurately – what the object is, who is in control of it, and where it is geographically located. A digital twin spans the object’s lifecycle and is updated from real time data.
Partner Government Agency (PGA): a division of the federal government that regulates specific products imported/exported to the United States along with CBP.
CBP’s interest in ledger technology has evolved over time. Initially, the agency began its exploration with blockchain technology, recognizing its transformative potential. However, acknowledging the dynamic nature of technology, CBP strategically transitioned to the broader concept of ledger technology to allow for greater flexibility and technological diversity, while also providing a secure and permanent record of transactions.
In 2021, CBP pivoted away from blockchain and ledger technology to focus on interoperability, or the ability of multiple types of systems to communicate with each other. Adoption of global interoperability standards enables different systems to connect and exchange data, including legacy systems, mobile, blockchain, DLT, and any potential future systems. This deliberate approach enables CBP to avoid technological lock-in, ensuring adaptability to emerging innovations.
The World Wide Web Consortium, or W3C, is a global standards development organization that manages development of open standards for an interoperable web to meet requirements for accessibility, internationalization, privacy, and security. DHS participates as a W3C member to ensure DHS-relevant security criteria are incorporated into the standards development process.
When used in unison, VC and DID provide for development of digital twins that describe what the item/good is, who is in control, and where it is geographically located. Adopting these technologies will position CBP, PGAs and trade users to receive and transmit data between traditional, as well as non-traditional, trade entities worldwide, in near real time. With greater supply chain transparency, CBP and partner government agencies will be able to make faster admissibility determinations on cargo. CBP envisions this technology as a transformative force, poised to play a key role in global goods movement and streamlined entry processes into the United States.
The evolution from blockchain to interoperability reflects CBP's commitment to fostering collaboration and choice within the trade ecosystem. CBP’s ultimate goal has always been to gather data throughout the supply chain, creating a full representation of a product intended for import. Integrating global interoperability standards allows trade partners to maintain technology choice while future-proofing the industry for new and disruptive technologies.
For more information about CBP’s testing and implementation of global interoperability standards visit the Testing and Development page.
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