A. General Information
TradeTrust
B. Lessons Learned
Developed and pioneered by the Infocomm Media Development Authority (IMDA), TradeTrust was designed to address the challenges of paper-based international trade. TradeTrust, which is built upon OpenAttestation , comprises globally accepted standards and frameworks that allow governments and businesses to endorse, exchange and verify documents and effect title transfer across different digital platforms seamlessly.
The need is to address the challenges of paper-based international trade.
Digitalise the Bill of Lading document (among other required trade documents) which is commonly used in documentary trade financing arrangements. Facilitate online presentation of all required electronic documents to the banks for verification and title ownership transfer (for eBL) Decentralize the transactions for an eBL by allowing pilot participants to use different digital solutions/platforms to verify and transact the digital document
Blockchain or Distributed Ledger Technology is used as it can demonstrate provenance, which is required for the legitimacy of documents such as Bills of Lading. One of UNCITRAL MLETR’s requirements for electronic transferable records is to ensure singularity of the record. TradeTrust uses Non-Fungible Tokens (NFTs) to satisfy this requirement when dealing with Transferable documents and Blockchain is used to record the NFT transactions. TradeTrust relies on public blockchain technology (either Ethereum or Polygon) to electronically endorse and transfer the ownership of a trade financing document amongst the stakeholders along a trade flow. TradeTrust’s use of public blockchain was a deliberate choice as in a global setting, there should not be a need for a central authority or body to govern the use of a network and gatekeep participation. Public blockchains also allow for an open and interoperable system that enables all international parties to participate.
TradeTrust can be utilised to digitalise two categories of documents used in cross-border trade: Normal documents/Verifiable documents such as the Certificate of Origin where the provenance and authenticity of the e-document can be easily verified by any party; and Transferable Documents such as Bill of Lading where the e-document’s title ownership can be transferred from one party to another.
Legal certainty for electronic Transferable Documents Increase efficiency, lower cost and lower risk of fraud Support innovative service offerings
For Transferable documents, TradeTrust has been developed to meet the requirements of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Transferable Records (MLETR) which has been adopted into Singapore’s legislation in 2021. TradeTrust’s open-source code is freely available and can be easily integrated into any existing system of businesses and solution providers to create and verify documents in support of viable use cases. TradeTrust has partnered with authoritative International Organisations such as UN/CEFACT and ISO to ensure that TradeTrust technical methods are compatible with existing standards and where appropriate, drive their acceptance as an international standard through the organisations’ respective open and neutral standards development processes. In addition, TradeTrust is advocated as the key interoperability mechanism for trade in several notable publications by World Trade Organisation (WTO) and International Chamber of Commerce (ICC).
The use of cryptocurrencies in TradeTrust is to pay for the recording of NFT transactions for electronic transferable records during issuance, ownership transfers, and surrender etc. In operationalising TradeTrust, Business Solution Providers insulate users from cryptocurrencies, managing the cryptocurrencies required to pay for the recording of the NFT transactions. The cryptocurrency utilised in TradeTrust is neither used in the settlement of the trade (i.e. payment for goods) nor is tradable. The cryptocurrencies involved is used solely to power the recording of the electronic trade financing document from the transferer to transferee on a public blockchain.