To help the international trade finance industry in its transition from paper-based transaction processes to distributed ledger technology, BAFT—ABA’s global transaction banking subsidiary—today released technical and business best practices for a digital ledger payment commitment. A DLPC is a core component of all trade finance instruments involving a promise to pay that is registered on a distributed ledger technology platform built to conduct international trade.
The DLPC specifications “offer a standardized solution for companies to register digital representations of payment commitments on a distributed ledger,” said BAFT SVP Samantha Pelosi. “We encourage the industry to incorporate these specifications into DLT platforms for international trade to facilitate interoperability between the multiple trade solutions being developed to leverage the benefits inherent in DLT.”
BAFT is releasing these best practices for trial use and seeking feedback from early adopters. It hopes to incorporate that feedback in future versions of the DLPC specifications as they evolve into industry standards.