Singapore-headquartered DBS Bank and commodity trading company Trafigura are collaborating with Infocomm Media Development Authority (IMDA), the International Chamber of Commerce (ICC), Enterprise Singapore and tradetech Perlin to build a blockchain-powered open source trade platform, called the ICC TradeFlow platform. The platform is developed with an eye towards improving trade flows through the efficient connection of trade partners across borders and the streamlining of manual paper-based trade processes. There is already a planned pilot trade for the blockchain-powered platform involving US$20 million worth of iron ore to be shipped to China from Africa later this month.
According to a press release from DBS, the open-sourced trade platform is powered by Perlin’s blockchain technology and built on IMDA’s TradeTrust network infrastructure. The ICC TradeFlow platform is developed with interoperable functionality in mind, enabling it to interface with both current and future digital trade platforms. For example, the platform will allow companies and businesses based in digital harbors like Singapore to continue trading smoothly with countries that employ legacy paper-based systems. Another huge advantage of the open source trade platform is that all parties are also able to receive, send and act upon trade instructions in real time, thus reducing the end-to-end trade document transit time from 45 to just 20 days.
With the aim of developing a globally trusted network, IMDA is pressing ahead with its TradeTrust network for digital trade documentation exchange, and is cooperating closely with various agencies such as the Maritime and Port Authority of Singapore and Singapore Shipping Association to achieve this goal. As a result of conventional digitization efforts giving rise to increasingly fragmented digital ecosystems comprising of silo groups of user communities, TradeTrust intends to work within this space and help enable the various enterprise and platform systems to interoperate efficiently and effectively. The TradeTrust network will also promote transparency, help businesses and companies lower costs and promote cross-border trade by reducing the complexities and inefficiencies of trade occurring from the usage of paper-based documentation.
In a statement Jane Lim, who is assistant chief executive at IMDA, said: “In the area of trade, technologies such as blockchain can help market participants move beyond traditional manual, paper-based processes, streamlining their trade processes for higher efficiency and cost savings. TradeTrust aims to interconnect different trade platforms between paper to digital. We are pleased that Trafigura and DBS have leveraged the TradeTrust prototype in the ICC TradeFlow platform, and we look forward to working with more market participants globally to incorporate TradeTrust into their systems.”
Tan Su Shan, head of institutional banking at DBS Bank in a statement said: “DBS is pleased to lead the industry and work with global industry anchors such as Trafigura to co-create digital solutions to make the age-old business of trade finance more efficient, transparent and productive. By tapping into each other’s respective expertise in commodities and finance, our customers will be able to receive their goods at least 50% faster with much less paperwork. Solutions like these are timely as they meet our customers’ demands for increased transaction speed and optimised financing to promote better cash flow and capital management.”
Going forward, the partners in the collaborative effort will continue to iterate and improve the blockchain-powered ICC TradeFlow platform with the aim of global adoption. The platform will be further enhanced with outstanding features such as the ability to provide trade finance on the go, as well as offering background information and credit ratings on trade participants, couriers and vessels to build trust among counterparties, all with the goal of ensuring a more seamless trade process for everyone involved.
