Gunnar Collin, Head of Sales and Marketing at Enigio, provides an outline of the firm’s unique document technology, which creates trust in a digital world.


For centuries, trade has relied on physical paper documents and signatures, which provide tangible proof of originality and ownership. But the rising costs of international trade and the aftermath of the pandemic have accelerated a move towards digitalisation.

The possibility of creating legally effective digital original documents is identified as a major bottleneck in the move towards trade digitalisation. But recent technological advancements now make it possible to have digital equivalents of physical paper documents.

As international trade evolves, electronic commerce is increasingly becoming relevant, making the use of physical paper documents obsolete. In addition, the pandemic has exposed the shortcomings of dealing with physical paper documents as more businesses across the globe struggle to transact and exchange paper-based negotiable instruments such as promissory notes, bills of exchange and bills of lading. At a time when the internet is becoming a key platform for commerce, it is evident that a complete move into digital trade is necessary.

When it comes to sensitive legal documents, original paper documents have the upper hand as they provide full ownership, and the original can be distinguished from its copy with relative ease. Therefore, the digital original documents must have these qualities to achieve legal effectiveness.

Realising the importance of digitalisation as a top agenda point, especially in trade finance, the United Nation’s Commission on International Trade Law (UNCITRAL) has developed the Model Law on Electronic Transferable Records (MLETR) that provides a workable framework to facilitate the use of digital original documents as negotiable instruments. It focuses on the concept of functional equivalence that signifies the ability of a technical solution to demonstrate the key properties of a physically signed paper document. These properties include:

  • Capacity for an e-signature
  • Possibility to distinguish the original from its copies
  • The content of the electronic document should retain confidentiality similar to paper documents
  • The electronic document should be readable by humans as well as machines
  • It should also be transferable, stored, and processed by the holder.

The Model Law provides clear guidelines that governments can follow towards the adoption of legally binding electronic transferable records. So far, Bahrain, Egypt, Paraguay, the United Kingdom, and Abu Dhabi, to mention a few, are joining the fray with reforms that will make electronic signatures, contracts, and documents legally enforceable.


Jurisdictions adopting the MLETR

Following the guidelines set by the MLETR, Abu Dhabi Global Market (ADGM) is counted among the jurisdictions enacting legislation in favour of the use of electronic transferable documents and instruments. ADGM has enacted the Electronic Transactions Regulation 2021 as a confirmation of their belief in the legal enforceability of electronic negotiable documents such as promissory notes and bills of exchange.

Implementation of MLETR’s guidelines is gaining traction in levels as high as the G7, where dialogue between experts has started. The G7 has agreed to facilitate the adoption of electronic transferable records and opined that its effort to promote the adoption of digital solutions in trade finance would be made in acknowledgement that different domestic systems will require different legal solutions.

With this level of affirmation from the G7, the UK is quickly jumping on board with a message from Chris Southworth, Secretary General of the United Kingdom’s International Chamber of Commerce, calling for the UK to grab the opportunity and be the first country in the G7 to fully digitise its trading system and bring the UK in line with digitalisation initiatives in Asia.

Apart from the positive sentiments from the UK’s International Chamber of Commerce, the UK’s Law Commission has released a proposal geared to allow electronic documents to be adopted as legally enforceable documents in trade finance.


Digital Negotiable Instruments (DNI) initiative

The International Trade & Forfaiting Association (ITFA) has already established the Digital Negotiable Instruments (DNI) initiative to digitise bank guarantees, bills of exchange and promissory notes in the most pragmatic way. Furthermore, ITFA developed the “digital document” (dDOC) specifications that provide a vendor-agnostic technology-based framework to enable digital original documents to act the same way as paper original documents.

The specifications are built around four main technological requirements that include the security of the digital document file, electronic signatures, a DLT-based digital notary and possession through cryptographic key pairs.

Therefore, when a digital original document is created with a dDOC-compliant solution, it will be perfectly aligned with the guiding requirements laid out in the MLETR, having all the properties of an original paper document.

As the adoption of the MLETR increases, the necessity arises for a practical solution that can create legally binding digital negotiable instruments equivalent to original paper documents.



Enigio’s trace:original is designed as a functional equivalent of paper documents following MLETR and the dDOC specification.

The solution is unique and takes a different approach compared to current blockchain and distributed ledger solutions as it introduces a freely transferrable and possessable digital asset. Furthermore, the document can be read by both machine and man and can be digitally stored wherever the holder finds it suitable. trace:original is designed following the guiding requirements laid out in the Model Law:

  • It is signature and information-agnostic, allowing the user to create instruments in accordance with substantive national legislation and use acceptable electronic signatures.
  • It is uniquely identified by cryptographic hashes published on a blockchain, which also guarantees that the document has remained unaltered. The integrity is maintained without the need of publishing personal data or business information on a blockchain.
  • The person (or organisation) which is the holder of the corresponding private key is in sole control of a trace:original document, with the public key published on the blockchain to allow ownership to be securely verified. Not only is ownership exclusive, but any transferee can also be sure of it.
  • This exclusive control is also freely transferable, with no requirements besides access to a computer and connection to the internet. Free transferability is, of course, a key feature of negotiable instruments and documents of title in international trade.

In essence, the required aspects of an Electronic Transferable Record are achieved while maintaining a reliable standard for each component, making trace:original the perfect document technology for the creation and maintenance of digital negotiable instruments and documents of title.


What all this means for the world of trade finance

By having the same attributes as a paper document, a trace:original document is designed to be a legal equivalent to paper documents, for example promissory notes, bills of exchange, bills of lading, warehouse receipts, bank guarantees and standby letters of credit. Since it is a digital document, it can perform all the roles of its paper equivalent and is therefore fully interoperable between parties, systems and platforms. This also means that it is now possible to send and exchange digital original documents between parties and through any digital channel, including SWIFT. Using SWIFT for exchanging original documents under a letter of credit or documentary collection is essential as all paper-based original trade documents are today exchanged outside of SWIFT at a high cost, long lead times and many risks.

Enigio’s trace:original has been integrated with China System’s Eximbills and Finastra’s Fusion Trade Innovation to enable all their bank and corporate customers to easily start creating and managing digital original documents, removing the need for a central registry or central document repository.

The use of trace:original is also picking up in logistics for transport documents. Scanlog, a leading Scandinavian logistics company, has started creating digital CMRs using trace:original technology. The digital CMRs cut operational costs and speed up the entire process of transporting goods from source to destination. Scanlog is now able to work with a digital CMR with all of their customers and partners without any need to change their current processes, get onboarded to a specific platform or share data into a central registry. The CMR is still a CMR but now digital, which also gives the benefit for the issuer to track their cargo along the supply chain and multiple hand offs and also easily acquire evidence for insurance claims in case of damages or loss.