Linklogis
Linklogis Collaborates with The BIS Innovation Hub and Standard Chartered to Launch Digital Trade Token Solution

Linklogis Collaborates with The BIS Innovation Hub and Standard Chartered to Launch Digital Trade Token Solution

In a rapidly evolving global supply chain landscape, small and medium-sized enterprises (SMEs) play a vital role as engines of growth and innovation. However, accessing the necessary financing to fuel their operations has remained a significant challenge. Recognising the strategic importance of the SMEs and the staggering unmet trade financing gap, estimated at USD 1.7 trillion globally, the Bank for International Settlements Innovation Hub (BIS Innovation Hub), in collaboration with Linklogis, Standard Chartered, RD Technologies, and Simmons & Simmons, unveils ‘Project Dynamo’. This project delivered a visionary prototype leveraging the power of Digital Trade Tokens (DTTs) to empower SMEs and revolutionise the way financing is provided. ‘Project Dynamo’ represents a transformative solution, underpinned by cutting-edge technology, strategic partnerships, and a shared commitment to driving sustainable growth for SMEs.

An innovative and compliant application of decentralised financial technology in the trade finance industry

As highlighted in the project report titled ‘Catalysing Innovation for SME Growth’, released by the BIS Innovation Hub (Project Dynamo: financing small and medium enterprises in the digital age (bis.org)), this ground-breaking prototype showcases a novel application of decentralised financial technology within the trade finance industry. Conditional payments can be made by anchor buyers with DTTs, affording the SME suppliers, as the recipients of DTTs, unprecedented option to seek finance from institutional investors with such tokens before the fulfilment of the predetermined conditions.

The report offers valuable insights into the legal, regulatory, and commercial considerations necessary for adoption, making it a useful resource for central banks, policymakers, standards-setting organisations and the financial industry.

Charles Song, the Founder, Chairman, and CEO of Linklogis, expressed his enthusiasm, stating, ‘At Linklogis, we are excited to collaborate with the BIS Innovation Hub to apply innovative digital technology in financial contexts. We are leveraging our state-of-the-art supply chain finance technology to actively explore the digital asset market and promote technology-driven empowerment and product innovation. Our focus is on expanding financing opportunities for SMEs by working diligently to create new and diverse avenues for funding.’

Benedicte Nolens, head of the BIS Innovation Hub Hong Kong Centre noted, ‘Selecting and completing this project has been an exciting journey. From the early concept of applying digital tokens to trading activity for the benefit of SMEs, to designing the tokens on a public blockchain with programmable features such as eBL and ESG triggers, and to analysing the regulatory compliance and legal implications, it has been a true learning experience that we hope may benefit the further evolution of the use case.’

Drawing on its extensive experience in transaction banking, Standard Chartered, an institutional collaborator of the project, is committed to exploring innovative financing methods in support of the real economy growth worldwide. Ricky Kaura, the Head of Transaction Banking Asia Pacific, Africa and Middle East of Standard Chartered stated, ‘Through our collaboration with the BIS Innovation Hub Hong Kong centre and fintech partners such as Linklogis, we are excited to leverage the compliant use of digital assets to provide businesses with financing solutions that are more efficient and accessible, so that they can reach their full growth potential and in turn contribute to the global economy.’

Norman Chan, Chairman of RD Technologies and the former Chief Executive of the Hong Kong Monetary Authority, said ‘RD Technologies is very pleased to collaborate with the BIS Innovation Hub, Linklogis and the other industry pioneers on Project Dynamo, in which the RD ezLink Digital Corporate ID solution helped meet the Know-Your-Customer (KYC) and customer due diligence (CDD) requirements for the participating parties efficiently and in compliance with high regulatory standards. RD ezLink is the first digital Corporate ID issuance platform in Asia, which will become a key infrastructural building block for businesses and organisations wishing to operate in the Web3.0 world.’

Angelia Chia and Sonia Lim, Partners of Simmons & Simmons, commented that “With the focus on digitalisation today, we are very happy to be able to support this project which involves esoteric issues in a highly innovative product. We look forward to working with market participants and others on the development and application of digital assets in the global marketplace”.

The release of this report signifies a significant contribution to fostering responsible, sustainable, and compliant innovation through public private partnership. It offers valuable insights to various stakeholders, and catalyses future innovation in support of SME growth that benefits the real economy.