Singapore’s TradeTrust project has now had its utility proven on a new cross-border trade route, following the completion of three pilot transactions between Singapore and China.

TradeTrust is a digital utility that comprises a set of globally accepted standards and frameworks and aims to simplify cross-border trade by enabling interoperability across different trade platforms and formats. Its goal is to work with different blockchain technologies, such as Hyperledger and R3’s Corda, by connecting them to a common public blockchain.

The first two transactions, completed by Singapore-based UOB and its Shenzhen branch in China on September 15, comprised two digital letter of credit (LC) transactions involving electronic bill of lading (eBL) simulations.

So Lay Hua, the bank’s head of group transaction banking, tells GTR that the two transactions used in the tests saw Singaporean company Tri-Star Electronics purchase consumer electronics from Shenzhen Uni-Right Industrial Trading Co; and Manufacturing Network purchasing non-ferrous metals from Guangdong Guangyun New Materials Co, with the goods being carried by Pacific International Lines.

Joining the simulations were GUUD Finance and Linklogis, which integrated their digital platforms with TradeTrust to connect the digital trade data flows between Singapore and Shenzhen.

“The successful pilots with our Singapore and Shenzhen clients reduced the processing turnaround time from a few days to within an hour and demonstrated the interoperability of TradeTrust for paperless workflows within the trade ecosystem,” says So. “With this, electronic bills of lading and other electronic trade documents can be transferred across the ecosystem and the whole trade finance cycle in a fast and seamless manner. We look forward to working with our clients from across the region to enhance their cross-border trade efficiency and to optimise their working capital with greater digital connectivity.”

In a separate transaction also using GUUD Finance and Linklogis’ digital platforms, DBS Singapore, DBS China and Singaporean machine tool manufacturer Makino Asia conducted a technical trial on the exchange of eBLs and other digital trade documents under LC terms, demonstrating a digital end-to-end LC settlement across platforms and jurisdictions.

According to a statement by Singapore’s ministry of communications and information, MUFG Singapore will partner with Advantest Corporation to conduct a pilot for cross-border trade financing along the same trade lane in the next quarter, while Bank of China and ICBC have also committed to organising technical trials on trade financing in the coming months. After the successful technical trials, the banks intend for commercial transactions to follow.