Lilly Andrews, Neda Mikalauskaite, Kateřina Kučerová
Can blockchain be used to tokenize and track an entire supply chain?
Supply chains for multinational corporations are extremely complex, and therefore lack full transparency. Some of the companies that prioritize strident adherence to ethical conduct still cannot fully trace their inputs across all of their products, as supplies are bought by intermediaries who then sell to suppliers. As discussed in the Harvard Business Review article on the subject, when there are mistakes in the supply chain, it can be very complex to fix them and difficult to figure out where the problem actually first arose: “although ERP systems capture all types of flows, it can be tough to assess which journal entries (accounts receivable, payments, credits for returns, and so on) correspond to which inventory transaction.” Issues in the supply chain can cause inefficiency which is bad for the environment; the example provided by the HBR article describes supermarket inventory expiring before it is sold. Giving assets digital tokens allows them to be understood and tracked with more granularity. Using a blockchain for any given supply chain allows a company to have “a chronological string of blocks integrating all…flows in the transaction and captures details that aren’t recorded in a financial-ledger system, and [all participants] maintain their own copies of the blockchain.” This is useful for companies themselves, but also for the consumer. If the consumer were able to see this information, they could be assured that they know exactly where each ingredient or material in a product came from and who produced it. Nevertheless, there are many obstacles to the full implementation of a fully-tokenized supply chain using blockchain technology.
Arianee Example
Arianee offers open and interoperable Digital Product Passport (DPP) solutions for durable goods, advancing circularity, data compliance, and post-purchase engagement. Arianee collaborates with over 50 brands as the most widely adopted protocol for Digital Product Passports.
A Digital Product Passport links physical products to a digital identity, providing essential information about their origin, history, and ownership. DPPs support a range of functions, including traceability, authentication, and consumer transparency. As part of the EU Green Deal, the European Commission is introducing the Digital Product Passport Regulation to help achieve climate neutrality by 2050. This initiative aims to increase transparency around product sustainability and encourage more eco-friendly choices by facilitating repair, reuse, and recycling. The regulation applies to all physical goods placed on the EU market or put into service, making it a key development with significant implications for global trade.
Case Study: IBM and TradeLens, can a supply chain be truly tokenized?
In 2018, IBM and Maersk, a Danish shipping and logistics company founded in 1904, joined their forces in order to tokenize the supply chain. This was meant to be done through a joint venture called TradeLens. It was a high-profile attempt to use blockchain technology to increase transparency, efficiency, and security in global trade logistics. In 2022, the project was shut down despite its technological promise. But what was TradeLens and why did it fail to reach its aim?
TradeLens was a blockchain-based platform launched to digitise and streamline the global shipping supply chain. It used Hyperledger Fabric, a permissioned blockchain, thus, just as with Ethereum, only verified participants could access it. Over 90 organizations eventually participated, from port operators, customs authorities, shipping lines, to freight forwarders.
The project aimed to tokenize and track supply chain events, meaning it would record the journey of goods from origin to destination on a blockchain ledger. Tokenize documents (like bills of lading, invoices, customs declarations) as digital assets while ensuring traceability, security, and real-time visibility of supply chain data. This process would then eventually cut down paperwork, fraud, delays, and administrative costs, improving trust among stakeholders (who often don’t trust each other).
How was it supposed to work ?
1. Each supply chain event (e.g. shipment departure, customs clearance, arrival at port) was recorded as a blockchain transaction.
2. Smart contracts would automate steps like approvals, payments, and document exchanges.
3. All stakeholders had permissioned access to the same “single source of truth.”
4. Tokenized versions of bills of lading and invoices were to be traceable, immutable, and shareable without duplication.
This functionality was meant to ensure transparency as everyone in the network sees updates in real-time; trust as immutable records reduce disputes and fraud; efficiency with automation that replaces paper-based and manual processes; security as data cannot be altered retrospectively; and finally, cost reduction through reduced delays, errors, and bureaucracy.
Why did it fail?
1. Lack of Adoption: The system needed mass adoption to be effective. Many supply chain players (especially competitors of Maersk) were reluctant to join a platform co-owned by a rival. However, a blockchain is only useful if all or most participants in the supply chain adopt it.
2. Closed Ecosystem: Built on Hyperledger Fabric, a private blockchain, limiting interoperability and external integration. Permissioned ledgers made onboarding technically complex and administratively burdensome.
3. Governance Issues: Maersk’s central role discouraged neutrality. Competing firms and ports feared data sharing with a competitor.
4. Complexity and Cost: Integrating legacy systems into the blockchain was technically complex and expensive. Smaller participants lacked the technical capacity to adopt blockchain infrastructure.
5. Lack of Incentives: Blockchain benefits were not immediate or easily quantifiable. Many firms didn’t see a clear ROI (Return on Investment) in joining TradeLens.
6. Regulatory and Legal Uncertainty: Legal recognition of blockchain-based documents like digital bills of lading was still evolving. Without regulatory certainty, tokenized documents could not replace paper equivalents in many jurisdictions.
Therefore, can blockchain be used to tokenize and track an entire supply chain?
Theoretically, yes. Nonetheless, practically (as of now), not easily. Blockchain can tokenize goods, events, and documents. It can track provenance, automate actions via smart contracts, and build trust without central authority but it also requires broad participation, legal recognition, interoperability, and cost-effective integration.
It struggles when actors are competitors, the tech infrastructure varies, and data governance is sensitive.
TradeLens showed that blockchain can technically support supply chain tokenization, but the real-world challenges of coordination, governance, scalability, and economic incentives made it unsustainable. The dream of a fully tokenized and blockchain-tracked supply chain remains alive, but it likely requires: neutral governance structures (e.g., consortiums); open, interoperable platforms; global legal alignment on digital documents; and simplified, modular tech integration.
How can blockchain-based reward systems incentivize plastic waste collection?
Blockchain is becoming a promising tool for improving how we waste is managed. With global waste levels rising and traditional systems often being inefficient or disconnected, there is a real need for better solutions. Blockchain helps by increasing transparency and traceability, making it easier for different players—like cities, waste companies, and recyclers—to share information and coordinate more effectively.
One of the key advantages of blockchain is that it creates records that cannot be changed. This makes it possible to track waste throughout its entire journey, from collection to disposal or recycling. It can help reduce fraud, like illegal dumping or false reporting, and also support better planning for things like collection routes and staff allocation.
Another important benefit is that blockchain can be used to encourage better recycling habits. For example, people can earn digital tokens when they recycle properly, which they can then use to get discounts or rewards. This kind of incentive system makes it more appealing to take part in sustainable waste practices and supports a circular economy.
There are already a few projects putting this into practice. WasteCoin rewards people for recycling, Plastic Bank helps fight ocean pollution while supporting people in need, and VeChain makes it easier to trace recyclable materials through the supply chain. These examples show that blockchain can actually work in real-world waste management settings.
Plastiks Example
Plastiks is a blockchain technology with the purpose of documenting the recycling of plastic for businesses. This is an important use of blockchain technology because it allows businesses to be fully transparent about their plastic usage and where these plastics go after their use. According to the company’s website itself, “plastiks offers clear records of how materials are handled and transformed, ensuring compliance with environmental standards and transparency.” Businesses first log how much plastic they use, then “authorized entities collect plastic waste,” according to the Plastiks website. This is a kind of plastic traceability that allows businesses to be fully transparent with consumers and fully understand their own plastic waste. Plastiks is built on the CELO blockchain, which is an Ethereum L2. Its clearly still a small project, but there is real potential for plastiks to expand and grow.
Sources:
- Blockchain Fails to Gain Traction in the Enterprise, Wall Street Journal, 2022
- Case Study: Why Maersk’s and IBM’s TradeLens Failed and Why HEALE Network Will Succeed, healelabs.com, 2024
- The closure of TradeLens: when technology is not enough, piernext.portdebarcelona.cat, 2023
- Building a Transparent Supply Chain, The Harvard Business Review, 2020.
- https://www.plastiks.io/our-technology
- Arianee | leading nft platform for digital product passports. (n.d.). Retrieved 13 April 2025, from https://www.arianee.com/digital-product-passport
- Arianee | linkedin. (n.d.). Retrieved 13 April 2025, from https://fr.linkedin.com/company/arianee
- CIFDAQ. (2023, October 12). Reinventing waste management with blockchain. Medium. https://medium.com/@CIFDAQ/reinventing-waste-management-with-blockchain-b411cd92f08d