As part of its commitment to the digitisation of trade, the International Chamber of Commerce (ICC) recently launched ICC TradeFlow, a blockchain platform designed to streamline trade processes for business.
Created in partnership with DBS Bank, Trafigura and Enterprise Singapore, ICC TradeFlow is built on the Infocomm Media Development Authority’s (IMDA) TradeTrust network infrastructure and powered by blockchain provider Perlin’s technology. The platform enables businesses to visually map out trade flows, issue instructions to partners, and analyse trade actions in real time. On the platform, businesses can upload, verify and modify trade documents, as well as act upon instructions from trading partners. Other components of the platform include a ‘trade clock’ to keep progress of a particular transaction, as well as anti-fraud protections for shipping and documentation.
A pilot trade of US$20mn of iron ore will be shipped from Africa to China this month, with all parties able to send, receive and act upon trade instructions in real time, cutting the end-to-end trade document transit time from 45 to 20 days.
This is the latest in what has become something of a trade digitisation arms race between Asian financial hubs Hong Kong and Singapore, as both jurisdictions work to transform the paper-heavy trade finance process to a streamlined, digitised version, whereby customers can easily and securely exchange their trade, financing and shipping information.
Last year, Hong Kong launched eTradeConnect, a similar blockchain platform concept which is aimed at digitising open account transactions. Based on Hyperledger Fabric, the solution is built by OneConnect, the fintech arm of Chinese insurance firm Ping An Group, and run by Hong Kong Trade Finance Company. Most recently, two proofs of concept have been completed to demonstrate both the feasibility of data exchange from the financing and shipping cycles, and the possibility of integrating the platform with customer procurement systems.
To understand the need for yet another trade digitisation blockchain initiative in Asia, GTR speaks to John Denton, secretary general of the ICC, who explains the thinking behind the launch.
GTR: How does ICC TradeFlow differ from similar initiatives such as Hong Kong’s eTradeConnect?
Denton: The broad concepts and functions are similar. However, we believe the ICC TradeFlow platform is a more flexible solution, based on its design focus on interoperability with other platforms, solutions and enterprise tools, both analogue and digital, existing and future. The underlying architecture for TradeFlow will support incremental adoption globally as different countries move toward digitisation at a different pace. This means fast-moving jurisdictions like Singapore can move forward with digitisation, but still have the ability to trade seamlessly with countries still using manual paper-based systems.
Working with ICC, Perlin has also built enterprise platforms and solutions that will ultimately plug into each other. For example, other key digital blockchain products include the ICC Clarify platform for value chain traceability and tracking, and the International E-Registry of Ships, for digital vessel registration.
ICC’s direct support is a further critical differentiator, leveraging its established role in developing and upholding global standards in trade, combined with its unparalleled network of influence, including over 45 million businesses, governments, other supra-national organisations and business chambers more than 100 countries.
GTR: Is ICC TradeFlow complementary to initiatives like eTradeConnect or will it be a competitor?
Denton: The Perlin team fully supports the larger ecosystem for innovation in digital technologies and blockchain and is open to partnering with anyone in the space. Collaboration is more constructive, and we welcome opportunities for integration with other platforms and solutions. We believe that the most productive and relevant strategy for truly global adoption is to allow all existing ‘digital islands’ that are developing in parallel but not interoperating to be able to work together for seamless global functionality. We want to break down all the silos and stitch all the disparate digital islands together. The positive network effects available mean that the whole is greater than the sum total of its parts.
eTradeConnect presents an interesting and potentially powerful opportunity for cross-integration as they have a different geographic and market focus. We believe we can work together for mutual benefit rather than engage in unconstructive competition.
GTR: Where will the next rollout be after Singapore?
Denton: TradeFlow is fundamentally designed as a global trade platform, which can be deployed anywhere in the world where there are interested partners. The pilot trade involves the flow of iron ore sourced in Africa, moving through Singapore and onward to China as final destination. The very nature of the digital commodity trading market we are serving is global.
While much of the Perlin TradeFlow team is based physically in Singapore and enjoys the support of the Singapore government, there is nothing preventing us from onboarding partners from anywhere in the world. Singapore is simply the initial testbed for refining and improving the platform. Our larger development team is also based all around the world in Europe, Southeast Asia and Australia – and will be growing its presence elsewhere as the company scales up to meet increasing demand.
ICC’s support on the global stage has already resulted in companies and organisations engaging in product pilots in a wide range of markets including the EU, China, North America, Latin America, India, Israel, Australia, Africa, Indonesia and other regions. We also have signed agreements in place for platform development and distribution partnerships in Dubai for the Middle East and North Africa, Colombia for Latin America, Montenegro and Angola.