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An international consortium comprised of industry and technical experts, backed by government bodies, businesses, and various organisations, has successfully completed a groundbreaking quantum-secure cross-border electronic trade document transaction.

This achievement marks a significant milestone in the journey towards fully digital international trade, offering a verifiable, secure, and legally recognised solution for future digital trade transactions. The outcome of this pilot program will pave the way for more cost-effective, simplified, expedited, and sustainable international trade.

The pilot, created by the International Chamber of Commerce UK and the Centre for Digital Trade and Innovation (C4DTI) on behalf of the UK Government, with the support of Singapore’s Infocomm Media Development Authority (IMDA), entailed the transportation of sample building products from the United Kingdom to Singapore.

The transaction involved the utilisation of both traditional paper documentation and electronic trade documents, including an electronic bill of lading (eBL) and a digital promissory note. Notably, these digital trade documents were simultaneously reconciled using a Distributed Ledger Technology (DLT) in both jurisdictions.

The eBL flow of the transaction harnessed IMDA’s TradeTrust framework, which adheres to the UN’s Model Law on Electronic Transferable Records (MLETR). This framework empowers end users to seamlessly transfer, indorse, and verify documents, as well as effect title transfer across diverse digital platforms.

To ensure the utmost protection of the electronic trade documents against current and future cyber threats, including those posed by quantum computers, a quantum-secure ‘seal’ was employed. This cutting-edge technology, incorporating Arqit’s symmetric key agreement and quantum notary technology, fortified the documents.

Throughout the journey, the shipment was meticulously tracked in real-time, and the condition of its contents was continuously monitored using secure and cost-effective Internet of Things (IoT) technology developed at Imperial College London’s AESE Laboratory, led by Professor Julie McCann. The project received support from the PETRAS National Centre of Excellence for IoT Systems Cyber Security and the UKRI Impact Initiative Account (UKRI-IAA).

Additionally, to enhance the shipment’s security during transit, a tamper-resistant digital record of the location and state of the physical goods was embedded into an NFT (Non-Fungible Token) by Database of Native Assets Ltd (DNA) using IoT sensors and Kadena blockchain technology.

The pilot program was based on a pre-existing shipment dispatched by Permavoid Limited, a water management systems component manufacturer and a subsidiary of the Genuit Group, to Singapore. AG Midgley Ltd, a specialist consultancy, played a pivotal role in leading and overseeing the consortium from inception to completion.

Legal guidance and counsel were provided by Watson Farley & Williams LLP (WFW), an esteemed energy and transport law firm based in London and Singapore, in association with Wong Tan & Molly Lim LLC (WTL).

As part of the project, the electronic trade documents are undergoing legal scrutiny by WFW. The firm has advised that the eBL and digital promissory note utilised in the pilot satisfy the requirements of the UK’s Electronic Trade Documents Bill concerning possession and transfer of possession.

WFW Singapore, in association with WTL, will provide guidance on the application of Singapore’s Electronic Trade Act. It is noteworthy that both legislations are aligned with the globally enacted UN’s MLETR.

Nick Davies, Director of the Centre for Digital Trade and Innovation, said, “C4DTI, part of the International Chamber of Commerce UK, was very pleased to be part of this ground-breaking pilot and is grateful to all the consortium members who volunteered to be part of it and base it on a real-world international transaction. It provides a great example of how digitalisation can remove friction from trade between the UK and Singapore and is a practical demonstration of the improvements that are achievable under the terms of MLETR-type legislation and the negotiation of good, effective Digital Economy Agreements, such as that agreed between the UK and Singapore.”

Loh Sin Yong, Director of TradeTrust, IMDA, said, “As part of Singapore’s partnership with the UK to promote adoption of cross-border paperless trade, we are excited to support this industry-driven pilot. We believe the pilot has helped to demonstrate how the TradeTrust framework is able to aid solutions to be compliant with MLETR requirements for Electronic Transferable Records such as electronic Bills of Lading. IMDA will continue to work with public and private sector to help push for the digitalisation of global trade.”

Dr Barry Childe, Arqit CIO and Co-Founder, said, “Distributed ledger technology enables organisations to create unique, referenceable and transferable digital finance instruments, which offer significant advantages over paper-based alternatives. Arqit was proud to be the lead partner in this important project and to use our first-of-its-kind quantum-safe encryption technology to secure the transaction. The MLETR being enacted internationally ushers in an era of digital transformation in financial services, but you cannot invest in long term transformation that is not secure against quantum attack. We believe that Arqit alone can deliver that.”

Douglas Jakobi, DNA Co-Founder, said, “DNA is proud to collaborate with Arqit and Imperial College London on the ICC UK and C4DTI pilot program, and to have built a cutting edge end-to-end solution that will revolutionise international trade. At DNA, we make the power & security of the blockchain accessible to mainstream use cases with a simple to use tokenisation platform that bridges the physical and digital worlds.”