The government of Singapore is teaming up with an array of financial and tech-based organizations from all over the world to facilitate and accelerate the adoption of digital technologies in trade and commerce.
The initiative involves participation from the International Chamber of Commerce (ICC), APRIL, DBS Bank, Marubeni Corporation, Mastercard, Mitsubishi Corporation, Mitsui & Co., Mizuho Bank, MUFG Bank, Noble, NTT DATA, PSA International, Sompo Japan Nipponkoa, Standard Chartered Bank, Sumitomo Corporation, Sumitomo Mitsui Banking Corporation, Tokio Marine, and Trafigura.
“This public-private partnership between global organisations will be a significant leap forward to shift international trade from a paper-based system to digitally-enabled trade. It will create enormous potential value based on time and operational cost savings combined with the greatly reduced incidence of fraud and human error,” a press release said.
The newly developed system called ICC TradeFlow will be built on top of the Singapore Government’s TradeTrust network, enabling the interoperability across different trade platforms to exchange trade documents on a public blockchain.
The TradeFlow Alliance bases its operations on the trade platform TradeTrust, which is developed by the Singapore blockchain company Perlin. Using the TradeTrust platform, the alliance intends to reduce and then ultimately finish its reliance on paper-based trading. The aim is to leverage on blockchain technology to cut down on the fraud and crime possibility associated with the characteristics inherent in the legacy systems.
“Among business processes, trade
and trade finance continue to be the most onerous, with reams of physical paper
having to move from place to place to establish authenticity and ownership.
Digital technologies, especially distributed ledger, are well geared to solve
this, but this requires coordination from key players on a global scale.”
– DBS Bank, Singapore
One of the unique features of the blockchain system that will be use by the alliance is that unlike others which use private blockchains, this one will be a public one. The use of a public blockchain will have benefits, such as increased security and transparency. Another advantage will be that with the lower barriers of the technology, it will enable small and medium enterprises to jump on the international trade and contribute to the economy.
What the alliance has to overcome is the legality of digital documentation. Currently, there are almost no country that recognizes digital and intangible documents.