The Global Shift to Paperless Trade: A Regional Breakdown
- Nguyen Nguyen
- Mar 21
- 5 min read
Updated: Mar 22
The trade finance sector is undergoing a transformative, global shift. This shift is not happening uniformly but is shaped by regional economic priorities, geopolitical dynamics, and strong industry collaboration.
In Part 2 of our blog series, “Trade, Technology & Compliance – Navigating a Changing Landscape”, we explored how evolving regulations from the US, Europe, Asia and the Middle East are driving banks to automate their AML compliance processes. But automation alone isn’t enough—true transformation in trade finance requires digitisation as well.
Read previous installments of the series:
Virtually all documentary trade transactions today involve the flow of physical documents with an estimated 4 billion documents in circulation at any given time. Banks must receive and store these physical documents in addition to using them to process transactions for their clients. Even if banks scan and leverage technology to fully automate processing there are inherent inefficiencies from the industry’s historical use of paper based documents. Conversely if digitisation of trade documents was fully enabled yet banks haven’t yet fully automated their processes these fully digital documents would likely still need to be printed and manually reviewed, significantly limiting the benefits of digitisation. To drive real change, both digitisation and automation must go hand in hand.
In Part 3, we explore why historically trade has relied on paper documents, how legislative changes worldwide are accelerating the shift to trade digitisation, and what it means for banks looking to keep pace.
Trade Digitisation Across the Globe
Many ask why global trade has remained loyal to the use of physical documents. The answer is quite simple: while technology has made massive advancements that enable many forms of digitisation, the legal infrastructure that global trade is built upon has only recently begun to modernise and recognise the concept that digital documents can be the equivalent to paper-based documents.
A key enabler of this concept, and thus of digital trade is the UNCITRAL Model Law on Electronic Transferable Records (MLETR), which ensures that electronic trade instruments hold the same legal standing as their paper-based counterparts. Adoption of MLETR, however, remains uneven.
The UK is considered a leader in trade digitisation, as they were the first to pass law recognising MLETR. The UK’s Electronic Trade Documents Act (ETDA), passed in 2023, created a legal framework that allows electronic records to be the legal equivalent of paper documents. In the case of the US, adoption has been slow, as the MLETR must be enacted state by state. Over half of US states have adopted it, but a critical gap remains—most trade contracts in the US fall under New York State law, and MLETR is only scheduled for a vote in the NY legislature in June 2025. Until then, digital trade adoption in the US remains incomplete.
In recent years, Europe has seen a significant shift in its approach to trade digitisation. A key milestone in this transformation came in August 2024, when the EU and Singapore finalised a Digital Trade Agreement (DTA), the first of its kind for the EU, building on prior legal frameworks recognizing digital trade in both regions. This agreement signals a strong commitment from the EU to fostering digital trade by reducing paper-based processes, enhancing legal recognition of e-documents, and streamlining cross-border transactions.
The DTA underscores the EU’s willingness to embrace and facilitate digital trade, as it helps to build predictability and legal certainty for businesses, as well as reducing barriers to digital trade.
Beyond the EU, the momentum for digital trade is gaining traction globally. The past few years, as part of the UK-ASEAN Digital Innovation Partnership, organisations like the ICC United Kingdom, as delivery partners of the UK government, have led a number of initiatives and training programs, to help advance ASEAN’s ambitious goal of fully digitising trade by the end of 2026. An example of said program is the Digital Export Enablement Programme (DEEP), launched in 2023, aiming to equip SMEs in the ASEAN region of knowledge and skills in digital export. In July 2024, the ICC UK also delivered a two-day workshop in Jakarta, with the ASEAN Secretariat and ASEAN Member States, on trade digitisation.
The importance of digital trade is recognised across the region. All 10 ASEAN countries have adopted legal frameworks that recognise e-documents and e-signatures, ensuring alignment with global trade standards. From Indonesia’s Electronic Information and Transactions Law to Singapore’s Electronic Transactions Act and Malaysia’s Digital Signature Act, these regulations provide a solid foundation for seamless cross-border digital transactions within the region.
National banks of ASEAN countries have also joined the movement. The Central Bank of Vietnam has initiated a plan to digitise the country’s banking industry by 2030. This plan includes several initiatives, implemented within the existing legal framework, to promote and facilitate digital transformation in trade, and in banking as a whole. One key aspect of this effort is enhancing and refining the legal framework for banking digitisation.
The involvement of both the UK and the EU in ASEAN—a fast-growing, export-driven region—highlights the strategic importance of digital trade connectivity.
China has taken a proactive stance in trade digitisation, aligning its efforts with its broader Belt and Road Initiative (BRI). The country’s legal and regulatory framework increasingly supports electronic trade documentation, with recent legislation reinforcing the legal status of digital trade records. The People’s Bank of China (PBoC) and key state-owned banks have introduced initiatives to digitise trade finance processes, improving transaction transparency while ensuring compliance with government oversight. While supply chain finance has long been digital, China’s efforts are increasingly extending to documentary trade finance, signaling a shift towards broader adoption of digital solutions in cross-border transactions.
Japan has positioned itself as a regional advocate for trade modernisation. In 2024, the country updated its Electronic Transactions Act to align with global standards, facilitating wider adoption of electronic transferable records (ETRs). Japan is also actively collaborating with ASEAN on digital trade initiatives, supporting the region’s efforts to harmonise e-document regulations.
The UAE is looking to modernise their trade compliance. The TradeTech Sandbox is a standout initiative, providing a controlled environment where companies can test and refine digital trade solutions under the supervision of key regulators such as the Abu Dhabi Global Market (ADGM), the Central Bank of the UAE (CBUAE), and the Dubai Financial Services Authority (DFSA). The UAE is also one of the few countries that have adopted the MLETR within the Abu Dhabi Global Market (ADGM), reinforcing its commitment to international standards in electronic transactions.
The Role of Industry Bodies in Driving Digitisation
The transformation in trade finance is not solely driven by policymakers—it is actively shaped by industry collaboration and legal frameworks. Organisations like ICC, ITFA, and BAFT are leading efforts to establish clear digitisation standards, ensuring alignment between financial institutions, regulators, and technology providers. The ICC, in particular, plays a central role in driving the adoption of the MLETR, which provides the legal foundation for digital trade instruments to be recognised globally. By setting common guidelines and advocating for legal clarity, these initiatives help remove uncertainty, accelerate adoption, and pave the way for international trade consistency.
The global momentum for trade digitisation is undeniable, with significant strides being made across regions. Legislative advancements, such as the increasing adoption of MLETR and recognition of electronic documents as the legal equivalence of paper documents, are accelerating the shift towards paperless trade. Industry bodies are crucial in providing the legal frameworks that ensure consistency and foster cross-border trade connectivity. However, the journey towards fully digitised, paperless trade is still a work-in-progress. While over 100 jurisdictions now have some form of legal recognition for electronic trade documents, adoption remains uneven, and real-world usage is still limited.
While legal frameworks are being put in place, the true shift to digital trade depends on adoption by businesses and financial institutions. Many banks and corporates are only beginning to integrate digital processes, with paper-based workflows still dominating trade finance. Without modernising internal systems and processes, the benefits of legal recognition for electronic trade documents remain limited. Bridging this gap requires not just digitisation but full automation, ensuring that digital trade can move as efficiently as it was designed to.