Lloyds sends first digital trading document under electronic act

The ETDA gives electronic Bills of Exchange, Bills of Lading and other commercial documents the same legal footing as paper documents. The legislation is designed to give UK businesses and participants in the 60 to 80 per cent of trade transactions worldwide that are subject to English law, more flexibility in how they trade.

Lloyds Bank completed the transaction for Matalan Retail Ltd via Enigio’s trace:original solution. A digital promissory note was issued by Matalan to accept liability when settling a documentary collection for the purchase of garments from one of its suppliers.

Through the technology, the key documents arrived two days earlier than they would have, if the promissory note had been concluded on paper.

Gwynne Master, managing director, lending and working capital, Lloyds Bank, said: “This new legislation is a turning point for a cheaper, faster, and more sustainable global trading system. We’ve spent many years working with industry, government, suppliers, and clients to find ways to support the transition to digitisation, and we are pleased to be spearheading the practical implementation of the Act.”

Patrik Zekkar, CEO of Enigio, said: “This historical landmark transaction evidences a new era of trade and trade finance, where legislation and technology now truly work hand-in-hand and we are delighted that our trace:original solution has been at the heart of it. Unlike other digital trade solutions that require all parties to subscribe to digital platforms, trace:original only requires the party creating the document to be an Enigio user, directly or by proxy, therefore making it easier for businesses to make the switch to digital.”

Enigio’s trace:original solution removes the need to physically transfer notes. It enables the creation of digital documents that can be ‘possessed’ by an individual, transferred between parties and originals can be distinguished from copies, just like paper-based counterparts. This means digital documents can be used in processes where an ‘original’ document is required. Unlike other digital trade solutions that require all parties to subscribe to digital platforms, trace:original only requires the party creating the document to be an Enigio user.

This follows Lloyds Bank’s successful completion in August 2022 of the UK’s first transaction utilising a digital promissory note purchase.

Lloyds Banking Group also confirmed it has invested €3m (£2.6m) in Enigio to help expand and accelerate the use of digital documentation in trade.

The €3m investment will allow Enigio to expand its bespoke solution, trace:original, and Lloyds Banking Group led Enigio’s latest funding round, with existing investors Stockhorn Capital and MOOR Holding also participating in the raise totalling €6m.