3 days ago
Exporting Trust: How Blockchain Finance Can Redefine Trade Agreements
Programmable contract on blockchain
While the spotlight in Web3 remains fixed on ETFs, token listings, and stablecoin frameworks, a quieter but equally consequential evolution is taking shape at the edge of global commerce. In the last six months alone, the Bank for International Settlements expanded its cross-border wholesale CBDC pilot, Project mBridge, to include over 26 observing members. Meanwhile, the Monetary Authority of Singapore extended Project Guardian, testing tokenized trade finance and digital asset settlement with banks including JPMorgan, DBS, and Standard Chartered. Hong Kong Monetary Authority also launched Project Ensemble to develop innovative financial market infrastructure enabling seamless interbank settlement of tokenised money, initially focusing on tokenised deposits to support the growth of Hong Kong's tokenisation market.
On the protocol side, DeFi-native projects like Centrifuge are tokenizing invoices and short-term credit, while firms like Enclave Markets are developing encrypted execution environments for confidential trading. These aren't isolated experiments - they're signs of a maturing thesis: that programmable finance can redefine the foundations of international trade.
Today's trade infrastructure is a patchwork of legal fictions and trust intermediaries - letters of credit, bills of lading, third-party guarantees - many of which exist solely to simulate trust. Each one adds friction, cost, and settlement lag. Blockchain-based systems flip that dynamic by anchoring records on cryptographically secure, shared ledgers.
This is more than just a technical upgrade. As David Wells, CEO of Enclave Markets, puts it: 'When counterparties from different jurisdictions can rely on cryptographically secured records rather than opaque intermediaries, the trust barrier that typically adds friction and cost to international trade diminishes significantly.' He adds that, 'At Enclave, we use secure enclave technology to enable privacy-preserving verification. This means counterparties can validate critical deal terms or performance metrics without exposing sensitive business data. It's a foundational shift - you get transparency and confidentiality at the same time, something legacy systems just aren't built for.'
Where platforms like the now-defunct TradeLens stumbled due to governance limitations, decentralized or privacy-preserving infrastructure offers an alternative. Enclave, for instance, uses secure enclave hardware to enable private yet verifiable trades - part of a broader movement that includes confidential computing platforms and zero-knowledge middleware.
Beyond data transparency, programmable finance introduces automatic enforceability. Smart contracts don't just log terms - they execute them. When conditions are met (e.g., delivery confirmed via oracle or IoT sensor), payment flows instantly. If conditions fail, penalties or reversions execute without legal intervention.
This mechanism is already live in parts of the DeFi world. MakerDAO and Centrifuge have deployed real-world asset vaults tied to tokenized invoices and short-term credit. As reported, Maker's RWA vaults now account for a significant share of its fee income.
Denis Petrovcic, CEO of Blocksquare, frames it this way: 'Banks shift from paperwork gatekeepers to liquidity nodes, and insurers underwrite only risks the code can't cover.' He continues: 'In our real estate tokenization work, we've shown how anchoring legal agreements - like mortgage registration or loan collateralization - on-chain creates enforceable economic rights that are provable in real time. This reduces the need for buffer escrows and limits disputes. When you apply this to cargo or trade finance, it's easy to imagine similar benefits.' His company recently completed one of the first legally notarized tokenized real estate deals tied to a national land registry - a model that could extend to warehousing, shipping hubs, and other trade-linked assets.
The Dubai Land Department (DLD) has also launched the MENA region's first government-backed tokenized real estate platform, Prypco Mint, which enables fractional ownership of Dubai properties by minting real estate title deed tokens. This is supported by Dubai's Virtual Assets Regulatory Authority (VARA), marking the first time a government real estate authority in the Middle East has implemented a public blockchain-based tokenization of property title deeds, pioneering a more accessible, transparent, and efficient real estate market.
Perhaps the most profound shift is this: trade agreements, once enshrined in legalese and negotiated by diplomats, are now being expressed as code.
Project mBridge envisions programmable cross-border CBDC rails. MAS' Project Guardian is piloting asset tokenization and real-time DvP with institutional players. And emerging trade finance platforms are layering compliance, risk, and audit rules into smart contracts rather than spreadsheets.
This isn't hypothetical. 'We're already seeing smart contracts do things that used to take banks days or weeks to handle,' says Nicolas Vaiman, CEO of Bubblemaps. 'Instant escrow, peer-to-peer lending, collateral management. The technology simply offers more. And we're just scratching the surface - as more data sources and real-time proofs come online, I think blockchain-based finance will become the default operating system for trade, not an optional enhancement.'
The results: fewer intermediaries, faster time to cash, and real-time visibility across jurisdictions.
For decades, the global trade system relied on institutional credibility: the issuing bank, the national regulator, the trusted auditor. But programmable finance rewires that system to depend on logic, not legacy.
To be clear, this transition is still in its early innings. Regulatory coordination, technical standards, and enterprise integration remain uphill challenges. But the pieces are aligning: on-chain attestation, tokenized RWAs, fiat-backed stablecoins, and decentralized identity protocols are rapidly evolving into an interoperable trust stack.
The result isn't just digitized trade. It's a new form of enforceable, exportable trust—written in code, and verified on-chain.
