Global Shipping Business Network (GSBN), has signed a memorandum of understanding (MoU) with ZAN, a technology brand of Ant Group Digital Technologies, to enter into a partnership to explore technical innovations for tokenising the electronic bill of lading (eBL).

The bill of lading is one of the key documents used in letters of credit (L/Cs) issued by banks to establish proof of shipment and title of ownership, but it is unclear how an eBL developed by the partnership would interface with digital L/Cs now that GSBN's partner, Contour, has announced the termination of its operations.

Novel business models

As a legally binding document which details a physical shipment and serves as a means of transferring the title of goods, a tokenised eBL could pave way to the securitisation the world's US$25 trillion trade flows and bridge the global trade finance gap, which is estimated to currently stand at $2.5 trillion according to the Asian Development Bank.

"Together with ZAN, we will explore tokenising the rights to these shipments with the aim of unlocking an entirely new asset class. From here, we can create new securitisation opportunities to bridge the world's trade finance gap and create the foundations for novel business models, " according to GSBN's CEO, Bertrand Chen.

GSBN consortium members include global shipping lines including COSCO, Hapag Lloyd, ONE and OOCL as well as several major port operators.

Contour uncertainties

The neutral, not-for-profit consortium's ambition is to enable efficient, paperless and sustainable growth in global trade with its data infrastructure and ecosystem of partners. But how the ecosystem of partners will see the eBL integrate with digital L/Cs remains unclear.

GSBN's partner in previous digital L/C developments has been blockchain network Contour, which announced last month that it will be discontinuing operations permanently as of 30 November (DC World News, 31 October 2023).

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.