Vietnamese and Singaporean businesses cooperate to authenticate transactions using blockchain
(Dan Tri) - PILA (Vietnam) and TOTM Technologies (Singapore) cooperate to deploy cross-border commercial transaction authentication infrastructure, initially focusing on verifying letters of credit using blockchain technology.
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Letter of credit (L/C) is one of the popular tools in international payments, helping to ensure the rights of buyers and sellers in commercial transactions. However, the L/C verification process may still require many steps of comparison and checking between related parties.
According to PILA, manual verification can increase processing time and transaction costs, and poses risks related to errors or falsification of documents.
Representative of PILA (Vietnam) signed a strategic cooperation agreement with TOTM Technologies (Singapore) (Photo: PILA).
Within the framework of cooperation, PILA and TOTM Technologies plan to deploy cross-border data authentication infrastructure in the ASEAN region. One of the technologies used is Digital Certificates (Verifiable Credentials - VC), which operate in parallel with the current L/C process.
According to this model, the bank still issues and processes L/C according to the current process. Besides, the issuing bank can issue a VC to authenticate the information of the L/C.
Through a shared infrastructure based on blockchain, partner banks can check the source of issuance, integrity of information and validity of certificates.
The alliance representative said this approach is intended to help parties independently verify data, instead of having to rely entirely on the exchange and confirmation process between each pair of banks.
According to information from the business, the solution is designed not to replace L/C or create additional payment obligations, but to add a layer of digital authentication to the existing process.
Towards broader application in cross-border trade
In the project, PILA is in charge of VC issuance and verification infrastructure through the NDAKey blockchain platform. TOTM Technologies will integrate the solution with the Singapore Information and Communications Development Authority (IMDA) TradeTrust technical framework.
"The future digital economy is not only built on connection infrastructure, but must operate on trusted infrastructure. When data can be securely verified across borders, transactions will be faster, transparent and more efficient," Mr. Nguyen Phu Dung, CEO of PILA, shared.
According to the orientation announced by both sides, the system can be expanded to other applications in international trade, including Digital Product Passport (DPP). This technology can support the provision and verification of information about products, supply chains and origin of goods.
The two businesses also said they are targeting applications related to cross-border payment and data exchange in the ASEAN region, in accordance with the orientation of the ASEAN Digital Economy Framework Agreement (DEFA).
Digital Certificate (Verifiable Credentials - VC): A digital certificate according to W3C standards, containing information issued by an issuer certifying the subject. Each VC is digitally signed with the issuer's private key, allowing third parties to independently verify the issuance source and data integrity; Any changes to the content will invalidate the signature.
Letter of Credit (L/C): A written payment commitment given by the issuing bank at the request of the importing business, whereby the bank commits to pay a specified amount of money to the exporting business when they present a set of documents in accordance with the conditions of the L/C. L/C operations are regulated according to ICC's UCP 600 international practices.
Digital Product Passport (DPP): According to Clause 8, Article 3 of the Law amending and supplementing a number of articles of the Law on Quality of Products and Goods, a product's digital passport is a collection of information about the product and its supply chain, stored by barcode or appropriate methods or through an information database with a link, guaranteed to be readable or connected via appropriate equipment.