The textile and clothing industry sector has today a big environmental impact, not only due to the consumption of water and the use of toxic chemicals but also due to the increasing levels of textile waste. One way to reduce the problem is to circularise the, currently linear, textile and clothing value chain, by using discarded clothes as raw material for the production of new clothes, transforming it into a model of circular economy. This way, while reducing the need to produce new raw materials (e.g. cotton), the problem of textile waste produced is also reduced, thus contributing to a more sustainable industry. In this article, we review the current approaches for traceability in the textile and clothing value chain, and study a set of technologies we deem essential for promoting the circular economy in this value chain – namely, the blockchain technology – for registering activities on traceable items through the value chain, and the Internet of Things (IoT) technology, for easily identifying the traceable items’ digital twins.