UTN setting up Global Standards in Trade Finance
About a year ago, TradeIX and R3, along with the banks involved in the Marco Polo Network began working on the UTN, a project creating global standards and enabling interoperability between trade business networks and hence create the network-of-networks for trade, named the Universal Trade Network.
The UTN will allow trading parties, financial institutions and their systems, applications, and networks to exchange data, and transact peer-to-peer and in real-time through an open, standard technology infrastructure powered by blockchain technology. In addition, the UTN is aimed at promoting interoperability among the various blockchain protocols that have been introduced to the market during the last years.
“There are various trade finance consortia and new industry networks in the trade finance industry. However, each trade finance network will become a digital island that cannot connect or transact with others without bespoke and costly integrations if no global standards are introduced.” – Dani Cotti, Chief Network Officer, Marco Polo Network.
While over the past years, several new trade finance initiatives and networks have emerged, they are all facing the challenge how to establish seamless communication with each other. The UTN aims to tackle the issue of separate systems of digital silos that cannot communicate or share information between each other. The open standards of the UTN will define how trade systems and the software running on them communicate with one another including:
- Communication Protocols – what medium(s) do we use to exchange data?
- Data Models – what format(s) do we exchange that data in?
- Identity Frameworks – how do we identify who or what we want to exchange it with?
The UTN is a fully inclusive industry initiative which that will include logistics companies, insurance providers, technology and Fintech firms and B2B networks to develop standards for communication and information distribution along the blockchain, with the goal of being also inclusive for other distributed ledger networks to join and for all parties involved in global trade to adopt the standards.
Representatives from the leading trade finance banks, existing business consortia, networks and established industry bodies and associations have worked with R3 and TradeIX in agreeing on the design of the initial governance set-up and technical standards and compose an initial priority deliverables plan and a budget.While R3 and TradeIX are the initiators of the UTN initiative, the goal is to create a new and neutral standards body, the Universal Trade Network Organisation, in 2019. The Steering Committee and working groups are reaching out to potential funding partners to secure funding for the set-up of such an industry body and the first year of operation.