Related News

Payables finance market dips as interest rates, disclosure rules dampen demand

New template may spur open account trade finance distribution

Yap departs MonetaGo, returns to banking

Supply chain finance industry hopeful EU will soften late payment rules

Late payment issues worsening in global supply chains, Taulia data reveals

Supply chain finance platform Traxpay has inked an agreement with Arqit, a provider of encryption security technology, to develop digital trade finance instruments that cannot be hacked by quantum computing. 

London-headquartered Arqit says efforts to digitise trade documents and processes, including upcoming legal reforms in the UK, could help unlock a multi-trillion dollar global market for supply chain finance. 

“However, [this] also leaves global trade more vulnerable to cybersecurity threats,” the company says. “The emergence of quantum computers and ‘harvest now, decrypt later’ attacks further compound these risks, highlighting the need for quantum-safe digital finance instruments.” 

Traxpay says it will apply Arqit’s quantum-secure technology to its provision of digital bills of exchange and promissory notes. The Frankfurt-based company uses distributed ledger technology to ensure electronic records are unique, transferable and cannot be tampered with. 

The tie-up will mean an original and unique digital stamp can be applied to those instruments, ensuring they can be transferred securely and remain tamper-proof, the companies say in a joint announcement. 

“Malicious actors will undoubtedly target global trade as it undergoes transformative digitisation,” says Dominic Broom, Arqit’s senior vice-president for working capital technology. 

“Provably quantum-safe digital finance instruments are needed to maintain confidence in digital trade platforms and to defend against threats from both classical and quantum computers.” 

Quantum computing is a growing cybersecurity concern, as an algorithm can be used to derive a private key from a public key – in effect cracking a critical part of the internet’s security infrastructure. 

At the same time, Arqit says attackers are harvesting encrypted data en masse with the intention of decrypting it later using quantum technology. 

The company adds its quantum-secure software has been reviewed by the University of Surrey’s Centre for Cyber Security, whose programmes have been accredited by UK government intelligence unit GCHQ. 

The product, TradeSecure, is currently in live testing and is expected to launch next year “once enabling legislation has come into effect”, it says. 

Broom believes the technology will be essential in meeting information integrity standards set out in the UNCITRAL model law on electronic transferable records (MLETR), which provides a template for jurisdictions looking to legislate for electronic trade documents. 

MLETR states that a transferable instrument can be digital if it remains “complete and unaltered” apart from changes in the normal course of business. The model law also sets requirements around the security of hardware and software used to facilitate the transfer of records.