Singapore’s Infocomm Media Development Authority (IMDA), the Monetary Authority of Singapore (MAS) and the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) have successfully concluded the world’s first cross-border digital trade financing pilot of its kind.
Commercial partners DBS Bank, Emirates NBD and Standard Chartered also collaborated for the pilot.
IMDA developed TradeTrust as an interoperable framework that provides proof of authenticity, origin and ownership of digital documents used in trade finance.
This enables trading counterparties and transacting banks to validate documents digitally and securely even when they are on different trade finance platforms, and allows such documents to be exchanged with another party in real-time.
This helps mitigate the risk of fraud, reduce costs, and improve trust and efficiency.
The pilot used IMDA’s TradeTrust framework to facilitate the transfer of electronic records between jurisdictions that have adopted the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Transferable Records (MLETR).
This harmonises the legal recognition of digital documents such as electronic bills of lading (eBLs) across both jurisdictions, and complements the larger global trade movement by the G7 economies on adopting electronic transferable records in international trade.
IMDA, MAS and FSRA will continue to collaborate, adopting an iterative approach, with the objective of encouraging our businesses to phase out and switch from paper to digital documents as the mainstream practice to support trade finance.
Following the pilot, suitable systems and trade platforms can be used for live shipments of goods between the United Arab Emirates and Singapore.
Other commercial entities interested in adopting TradeTrust are invited to reach out to IMDA, MAS, FSRA or any of the partners.
Lew Chuen Hong, Chief Executive, IMDA, said,
“The pilot demonstrates how the TradeTrust Digital Utility can facilitate the digitalisation of trade finance processes. We have complemented this by providing legal certainty to electronic transferable records such as eBLs through the MLETR.
With TradeTrust, businesses large and small can now authenticate their digital trade documentation and transact seamlessly in the digital economy.”
Leong Sing Chiong, Deputy Managing Director (Markets and Development), MAS said,
“As a key trade hub and international financial centre in Asia, Singapore is keen to accelerate the digitalisation of trade finance to promote greater trust, efficiency and cost savings in the financing of global and regional trade.
With this pilot, we hope to see broader adoption of digital trade finance in Singapore and the region.”
Featured image: Edited from Unsplash