Advancing Digital Trade 2025

Enable data-driven financing models Jetstream Africa demonstrated that AI-driven credit decision-making can reduce approval times from weeks to minutes, while Voy Finance showed how tokenized trade assets could serve as transparent collateral. However, both solutions face barriers in scaling due to the absence of enabling infrastructure. Scaling these models presents several governance and implementation challenges. Regulators must evaluate the fairness of AI algorithms, ensure audit trails for tokenized transactions and address the lack of standardized invoice formats or asset registries.Unlocking these innovations requires: –Regulating invoice-based lending by licensing non-bank financial institutions and enabling trusted collateral registries –Establishing legal frameworks that clearly define tokenized trade assets and govern their use as regulated collateral –Developing public–private risk-sharing schemes that encourage lenders to finance previously underserved SMEs These changes would help address the global trade finance gap by creating more transparent, data-driven lending models that work for businesses of all sizes.5.3 Credit assessment and SME inclusion Credit assessment and SME inclusion FIGURE 3 Source: World Economic Forum Regulating invoice- based lending by licensing non-bank financial institutions andenabling trusted collateral registries2 Legal frameworks defining tokenized trade assets and gover ning their use asregulated collateral3 Public–private risk- sharing encouraging thefinancing of previously underserved SMEsTackling the $2.5 trillion global trade finance gap 1 Modernize payment and guarantee infrastructure Medad Holdings demonstrated that regulated stablecoins can reduce settlement times from days to minutes while eliminating correspondent banking fees. While providing the stability of a fiat-backed token, this also highlights the wider usability of stablecoins for jurisdictions that might not have access to US dollars and other fiat alternatives. Haifin showed how blockchain can digitalize the UAE’s AED 463 billion bank guarantee market, thereby reducing fraud and improving capital efficiency.Yet these innovations pose new regulatory challenges. Stablecoins, while operationally efficient, can affect monetary sovereignty. They also require ongoing verification of reserves, cross- border recognition and robust audit frameworks. Meanwhile, the transition from paper-based guarantees to digital ones involves managing the interoperability of legacy systems, maintaining data privacy across nodes and ensuring the enforceability of digital contracts in courts.5.4 Digital guarantees and payment settlement Advancing Digital Trade: Insights from the UAE TradeTech Regulatory Sandbox 25