UAE-based Emirates NBD and DP World Trade Finance, along with tech firms Enigio and iBind, have completed a proof of concept for an electronic trade transaction that incorporates participants’ digital identity. 

Stockholm-based Enigio, which specialises in electronic versions of original documents, says the project is a “unique milestone” in efforts to digitalise global trade and financial services. 

As well as replicating the physical flow of trade documents in a digital setting, the proof of concept also uses technology to prove that the companies involved have ownership and authority over those documents. 

“The proof of concept marks a pivotal moment in the evolution of digital trade finance, as it not only validates the digital trade documents such as an e-bill of lading, but also verifies and establishes the authority of the corporate entities involved in the end-to-end trade transaction,” Enigio says in an April 22 announcement. 

The digital identity system used is built on infrastructure developed by iBind, which has offices in India and Singapore and provides technology solutions to financial institutions. 

iBind says in a statement the transaction “demonstrates how the trade gap can be reduced by redefining the cumbersome and opaque processes to traceable and verifiable journeys”. 

The system works by linking electronic original documents directly to parties’ digital identities, which in turn are verified by participating banks based on their existing due diligence processes. 

Aneel Sabir, Enigio’s director for the Middle East region, says: “To use trusted data already held by a bank for the benefit of all transacting parties provides the ability for all parties to validate the data instantly, securely and without the need of a platform.” 

Speaking to GTR, Emirates NBD’s group head of trade product management, Vishnu Purohit says the pioneering nature of the project goes beyond testing whether a trade transaction can be done digitally. 

“Having concentrated our focus on the proofs of concept around digitisation of trade documents, there was one key piece that we figured was missing: the piece around digital identity,” he says. 

“Our focus is looking at the challenges that could be there for mass-scale adoption and how we can solve those.” 

Purohit says standalone solutions for handling digital trade documents are not sufficient for proving the identity and authority of a digital asset issuer, while managing electronic signatures can prove challenging due to differences in legal frameworks across jurisdictions.  

The management of private keys for documents – where each digital document is linked to a public and private key, the latter being held by the entity in control of the document – also results in a poor user experience, he adds. 

“That journey is absolutely broken,” Purohit says. “There is a requirement for all of these to be centralised in one place, which is a digital identity solution.”  

Sinan Ozcan, senior executive officer and board member at DP World Trade Finance, says the proof of concept shows how streamlining financial processes is “making it easier to deliver trade finance to the organisations that need it most”. 

“Our work with these talented partners matches with our aim of addressing the trade finance gap,” he says. “By collaborating with partners across the industry, we are bringing trade finance into the modern era and transforming the lending process.” 

Enigio’s announcement argues that there are other frameworks for digital identity, such as the legal entity identifier system, but says these “are not widely accepted” or designed specifically for digital trade. 

Emirates NBD’s Purohit says that within the UAE, efforts are currently underway to encourage reforms that would give electronic documents the same legal standing as their physical equivalents. 

“In this region, the law is not yet fully developed, so we have not seen a live transaction in the UAE at this point in time,” he says. 

“DIFC has enacted a comprehensive law on digital assets which includes electronic trade records, but certain laws are still required on the UAE side as well, and we are actively contributing in the efforts for a similar law in the mainland.”