The Joint Standing Committee of Commerce, Industry and Banking (JSCCIB) of Thailand announced recently that it has completed a trial of a trade platform leveraging blockchain technology and developed by a Japanese system integration company.
The test was run as part of JSCCIB’s private sector initiative to develop a National Digital Trade Platform (NDTP) in Thailand. The Chairman of JSCCIB stated that the project is being developed to boost international trade in Thailand and the broader ASEAN region.
NDTP would increase the efficiency of trades by reducing processing cost and time. It will also help curb double financing and fraudulent documents as well as improve access to finance for SMEs.
Forty-seven participants from 24 different industries explored the benefits of digitalization of trade documents for international trade. JSCCIB said the trial achieved over 60% faster processing of trade documents.
Researchers found it is a single integrated digital platform that connects all parties and enables the exchange of trade-related data and documents digitally, according to the Head of Business Requirements Working Group for JSCCIB.
The time and cost of export and import will be reduced dramatically, the risk of financial fraud will be mitigated, and the process of logistics and insurance arrangement will be streamlined through the platform.
The trade platform uses blockchain and AI, among other technologies. Thai banks, forwarders, carriers, exporters, insurers and a Japanese importer took part in the trial.
Trade documents such as purchase orders, invoices, shipping instructions, sea waybills, certificates of origin, export permits, insurance policies and other materials were exchanged electronically between the participants.
The primary goal is to link the trading platform with the National Single Window and other platforms developed by neighbouring countries to boost trade in the ASEAN region.
The NDTP Business Requirements Working Group Executive for JSCCIB stated that the test provided the participants with hands-on experience and opportunities for open discussion regarding the needs and requirements of the ongoing NDTP project.
The Japanese company said that it aims to do away with paper-based transactions and increase the efficiency of the trade process. It has been developing the blockchain platform in Japan since 2017 with support from a cross-industry companies consortium.
The company also has plans to introduce the trading platform in the ASEAN region with the backing of local government agencies and service provides.
Last year the firm announced it was involved in a major Japanese trial for a blockchain and IoT supply chain platform in conjunction with the New Energy and Industrial Technology Development Organization (NEDO). The company previously completed a blockchain trial for marine cargo insurance claims.
A few months ago, a survey by the company revealed that 53% of financial services executives saw blockchain, AI and IoT as having the most impact on the industry.
In Thailand, another major blockchain project is the trade finance Letters of Guarantee consortium of 22 banks.
Earlier this week, the Thai government announced three blockchain projects, for VAT refunds, bonds and procurement.
OpenGov Asia reported that the Finance Ministry plans to adopt blockchain-based value-added tax (VAT) refund service for foreign tourists, starting from the end of November 2019.
The blockchain technology for VAT refunds should speed up the process for tourists as details of their purchases will be immediately shared with the Revenue Department and the Customs Department once shops key in the information in the system, according to Thailand’s Finance Minister.