Singapore and Abu Dhabi have launched the world’s first cross-border digital trade finance experiment (UAE). The Monetary Authority of Singapore (MAS), Singapore’s Infocomm Media Development Authority (IMDA), Abu Dhabi Global Market’s Financial Services Regulatory Authority (FSRA), and commercial partners collaborated on the pilot.
Singapore, as a major trading hub and international financial center in Asia, is eager to speed up the digitization of trade finance to promote better confidence, efficiency, and cost savings in global and regional trade financing. We hope to see widespread adoption of digital trade financing in Singapore and the region as a result of this trial.”
The pilot used IMDA’s TradeTrust framework to make it simpler to transfer electronic records between nations that have ratified the United Nations Commission on International Trade Law’s Model Law on Electronic Transferable Records (UNCITRAL). This harmonizes both nations’ legal recognition of digital documents such as electronic bills of lading (eBLs), complimenting the G7 economies’ wider global trade drive toward digitally transferable records in international trade.
Global commerce is undergoing a time of greater uncertainty as a result of rising trade tensions, market volatility, and the continued ramifications of the COVID-19 issue. Banks that support international commerce are more aware than ever of the importance of digital operating models and the potential benefits they may deliver. Despite the fact that the financial industry is undergoing a digital transition, banks that enable international commerce are still seeking innovative ways to modernize their aging trade finance activities.
Much of today’s global trade financing is still done on paper or in analog form. This leads to a slew of issues, including honest errors, fraud, and lengthy delays. TradeTrust is a cross-industry system that verifies the authenticity, origin, and ownership of digital documents used in trade finance transactions. The entire operation paves the way for a digital transaction that is more smooth, straightforward, and speedy.
According to IMDA Chief Executive Lew Chuen Hong, the pilot shows how the TradeTrust Digital Utility can aid in the digitization of trade finance operations. “We’ve added to this by using the MLETR to give legal certainty to electronic transferrable records like eBLs.” Large and small firms can now validate their digital trade papers and transact effortlessly in the digital economy with TradeTrust,” he added.
IMDA, MAS, and FSRA will continue to collaborate in a phased way to encourage our businesses to phase out and replace paper papers with digital documents as the usual practice in trade finance. For live goods shipments between the UAE and Singapore, relevant technology and trade platforms can be employed following the pilot. Other companies interested in implementing TradeTrust should contact IMDA, MAS, FSRA, or one of the other partners.
At the annual World Economic Forum Annual Meeting in Davos, the International Chamber of Commerce (ICC), which has 45 million institutional members in 130 countries, joined the Singapore Government and a growing consortium of key industry partners to accelerate the digitalization of global trade and commerce.
The Singapore government and major companies from important industries have inked a landmark agreement to ease and accelerate the use of digital technology in trade and commerce.
“In the future years, digital platforms will reduce existing obstacles to international commerce, allowing many more enterprises to engage in the new global economy.” We are committed to enabling the broadest possible adoption of these digital technologies and support the development and recognition of universally accepted best practice standards for digitalization, based on global consensus and the work being done by our partners today, in line with ICC’s 21st-century purpose,” said ICC Secretary-General John W.H. Denton AO.