TradeTrust is a new digital global trade platform that uses blockchain technology to digitalize international commerce.
It can solve problems like why it takes two days to ship a good to a place, but it takes five days for the paperwork to catch up.
TradeTrust could be a very big deal, thanks to its supporters who are announcing it at the World Economic Forum in Davos, Switzerland. The supporters include the International Chamber of Commerce (ICC, the world’s biggest business organization), the government of Singapore, and 16 big companies including DBS Bank, Mastercard, Mitsubishi, Sumitomo, and others.
And they’re rallying around an obscure blockchain company known as Perlin, which is building an open-source technology. The alliance has signed a “historic cooperation agreement” to facilitate adoption of digital technologies in trade and commerce. Perlin developed its technology with the ICC to build a fast version of the blockchain, a secure digital ledger that uses distributed computing to verify data.
The global industry leaders participating in the agreement are APRIL, DBS Bank, Marubeni Corporation, Mastercard, Mitsubishi Corporation, Mitsui & Co., Ltd., Mizuho Bank, Ltd., 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 organizations will be a significant leap forward to shift international trade from a paper-based system to digitally-enabled trade, the group said.
It will create enormous potential value based on time and operational cost savings combined with the greatly reduced incidence of fraud and human error.
“Digital platforms will lower existing barriers to international trade in the coming years and enable many more businesses to participate in the new global economy. In line with ICC’s 21st-century purpose, 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,” said John Denton, ICC Secretary General, in a statement.
It isn’t the only group doing this. IBM has been touting its version of blockchain to streamline logistics for things like the coffee and olive oil supply chains.
But the supporters here are very interesting.
As one of the largest global trading hubs, Singapore is capitalizing on its strong networks to bring together an efficient and unified process of digitalized trade. The country is partnering various international organisations, governments and industry players on the development of TradeTrust — a multilateral, open legal and technical framework, that enables inter-operability across different trade platforms and formats for the exchange of digital trade documents on a public blockchain.
This strategic initiative is led by Singapore’s Infocomm Media Development Authority (IMDA) with the Maritime Port Authority (MPA), and supported by partner agency, Enterprise Singapore.
One of the first platforms built on the TradeTrust framework is ICC TradeFlow. ICC TradeFlow was co-developed by ICC together with trade tech firm, Perlin, in collaboration with IMDA, commodities trader Trafigura, and DBS Bank.
A landmark $20 million pilot trade was executed on ICC TradeFlow in November 2019, with an iron ore shipment from South Africa to China. To further support the industry-wide digitalization, partners in this pilot trade are making further major trade volume commitments to be executed on this platform.
The ICC represents more than 45 million companies in 100 countires. Dorjee Sun, CEO of Perlin, said in a statement the group is creating the “essential blockchain infrastructure needed for a more efficient, inclusive and sustainable global digital trade economy.”
He said Perlin is now going to the next level to help drive development and mainstream adoption of ICC TradeFlow and other enterprise blockchain solutions to achieve digitization across all international trade.
Michael Froman, vice chairman and president of strategic growth at Mastercard, said in a statement that the company looks forward to work with the group to facilitate inclusive global trade growth to make the digital economy work for everyone, everywhere.