MYEG, a Malaysian e-government service, signed an agreement with SGTraDex, Singapore’s national trade data exchange, to provide seamless blockchain enabled trade between Malaysia and Singapore. The two companies signed a Memorandum of Understanding (MoU) to formalize their business plans. The agreement was signed at the ASEAN GCC China Roundtable, an event that aims to boost trade in the Asian region by creating cross-border digital links. MYEG and SGTraDex will further investigate ways to secure their digital transactions so that they can transition from paper based transactions to digital forms. The business deal conforms to the ASEAN Digital Economy Framework Agreement (DEFA), which aims to boost secure digital cross-border transactions. The business partnership may also expand in the future to include China.
Singapore Trade Data Exchange Services (SGTraDex) wishes to partner with MYEG to create a secure blockchain enabled channel between the two companies, to enable an exchange of trade related data. The technical integration of these two countries could further be expanded throughout the Asian region. The business-to-business (B2B) model seems to be a good fit for blockchain technology because it can be scaled to include country-to-country applications, such as the strengthening of cross-border trade. This can be achieved by creating digital signatures of records, a transition from paper to digitised records, and a secure database that can be verified at any time. The blockchain channel will also serve the purpose of formalising regulatory documents, so that all parties can trade freely, speeding up the entire process and improving supply chain performance.
Dato’ Fadzli Shah, co-founder of MYEG’s blockchain Zetrix, said that the new digital infrastructure project is creating building blocks for a new unified Asia which promptes frictionless business transactions, accelerates growth, and promote trust. Tan Chin Hwee, chairman of SGTraDex, said that the partnership with Malaysia shows a commitment to boosting trade in the region and a commitment to facilitating open and transparent business practices. The two companies, SGTraDex and MYEG, will accomplish technical integration by creating channels between their own technologies, such as MYEG’s Layer-1 chain Zetrix and SGTraDex’s framework TradeTrust. Trade can be very complex between two countries and theoretically should be improved with blockchain technologies such as immutable chains. Trade within a country, especially when provinces have a lot of autonomy, can be a very time consuming process. Businesses may be able to capitalise on the partnership by benefiting from increased transparency and verifiable paper trails.
The ASEAN Digital Economy Framework Agreement (DEFA) complements the partnership between MYEG and SGTraDex because it aims to promote verifiable cross-border trade in the Asian region. The partnership, as described by MYEG managers, is a building block to realising DEFA’s wider goals for a unified Asian trade bloc. Blockchain can function as a digital infrastructure, allowing trade and business relationships to transcend borders. The world of business meets the world of elliptic curve cryptography and programming. Regulatory frameworks can be transferred from one context to another, utilising digital signatures, allowing businesses to verify transactions on a Layer-1 blockchain, so that business-to-business (B2B) links can be made with mathematical precision. In theory this sounds like a very promising proposal, but will inevitably face many challenges with the nature of cross-border trade in the Asian region.
SGTraDex is a public-private digital project founded by Singapore’s Infocomm Media Development Authority, which includes a consortium of companies from various fields including banking, trade, and logistics. SGTraDex aims to enhance cross-border trade by digitising logistics and allowing business-to-business (B2B) communications across the supply chain. SGTraDex engages in technical integration in that it allows various data silos to communicate without disrupting the underlying business models. The Memorandum of Understanding (MoU) between the two companies included various points of collaboration including the use of data silos to promote regulatory sandboxes. Both companies expect the partnership to act as a launchpad for further business-to-business (B2B) transactions with China. The partnership will function as a building block to establish ASEAN’s vision of a unified Asian economic trading block, that is both diverse and unified in its approach.
