Verifiable credentials to and from interoperable public and private wallets -supporting global trade

First take for interoperable business wallets (GBWs) for global trade documents. Feel free to improve.

My enterprise already have an organisation wallet in use and tested sending and receiving invoices. Simple for an SME. Just one document of 10s if not 100s eventually.

1. System Overview

At a high level:

Verifiable Credentials (VCs)
→ Digitally signed, cryptographically verifiable attestations
→ Stored in interoperable wallets (enterprise or personal)
→ Issued by trusted public/private entities
→ Verified without needing to contact issuer each time

In global trade, this creates a trust layer for cross-border interactions.

Think of it as:

• Containerization standardized goods movement.
• Verifiable credentials standardize trust movement.

2. Core Actors in Global Trade

All of these can issue and receive VCs through interoperable wallets.

3. The Trust Stack in Global Trade

Layer 1 – Identity

• Legal entity identity (LEI-based)
• Authorized representative identity
• Government business registry credentials

Layer 2 – Authority & Compliance

• Export licenses
• Import permits
• Sanctions screening attestations
• ESG compliance
• Origin certificates
• Product conformity (CE, FDA, etc.)

Layer 3 – Transaction State

• Bill of lading
• Insurance certificate
• Customs clearance
• Payment confirmation
• Inspection results

Layer 4 – Settlement & Audit

• Tax declarations
• VAT proof
• Trade finance fulfillment
• Carbon reporting

Verifiable credentials allow these layers to interoperate securely.

4. End-to-End Trade Flow with Wallets

Let’s walk through a real trade example:

Step 1 – Company Onboarding

Exporter shares:

• Business registration VC
• LEI VC
• Sanctions compliance VC
• ESG certification VC

Bank verifies instantly via cryptographic proof
→ No manual document upload
→ No repeated KYC per transaction

Step 2 – Contract & Financing

Bank issues:

• Trade finance approval VC
• Letter of credit VC

Importer verifies financing without contacting bank directly.

Step 3 – Shipment

Inspection body issues:

• Inspection passed VC

Insurer issues:

• Insurance coverage VC

Carrier issues:

• Bill of lading VC

All credentials flow wallet-to-wallet.

Step 4 – Customs

Exporter presents:

• Certificate of origin VC
• Export license VC

Customs verifies cryptographically:

• Valid issuer?
• Not revoked?
• Still valid?
• Data integrity intact?

Clearance VC issued back to exporter wallet.

Step 5 – Payment

Upon verified clearance VC:

• Smart trade finance triggers payment
• Bank issues settlement confirmation VC

5. What Interoperable Wallets Enable

Interoperability matters because:

• Public sector wallets (customs, regulators)
• Private sector wallets (banks, insurers)
• Enterprise wallets (exporters)
• Personal wallets (authorized signatories)

All must understand:

• Credential format
• Signature method
• Revocation mechanism
• Trust registries

Without interoperability, global trade fragments.

With it:

• Credentials become portable across jurisdictions.

6. High-Impact Use Cases in Global Trade

1. Digital Certificate of Origin

Today:

• Paper-heavy
• Fraud-prone
• Manual verification

With VCs:

• Government-issued
• Instant verification
• Prevents duplication
• Reduces fraud

2. Trade Finance Automation

Banks issue:

• Conditional approval VC

When:

• Inspection VC + Customs clearance VC received

Then:

• Payment auto-triggered

Reduces:

• 7–14 day document checking cycles

3. ESG & Carbon Border Adjustments

Exporter shares:

• Verified carbon footprint VC
• Supply chain traceability VC

EU customs verifies compliance instantly
→ Critical for CBAM-like regimes

4. Sanctions & AML Compliance

Instead of repeated screening:

• Regulated entity issues sanctions clearance VC
• Time-bound & revocable

Speeds up onboarding dramatically.

5. SME Inclusion

Small exporters:

• Carry portable compliance credentials
• Reuse across multiple buyers/banks

This lowers entry barriers.

7. Structural Benefits at System Level

1. Reduced Transaction Costs

Manual document handling costs ~5–10% of trade value in some corridors.

VCs:

• Remove reconciliation
• Remove repeated KYC
• Remove document fraud

2. Fraud Reduction

Cryptographic signatures:

• Prevent forgery
• Detect tampering
• Enable revocation

3. Data Minimization

Selective disclosure:

• Prove compliance without revealing full datasets
• Protect trade secrets

4. Real-Time Regulatory Visibility

Regulators receive:

• Structured credentials
• Machine-readable compliance data

Improves:

• Risk targeting
• Border control efficiency

8. Governance Requirements

For global trade deployment, you need:

2. Trust registries

• Which customs authorities are trusted issuers?
• Which banks are authorized?

3. Common standards

• W3C Verifiable Credentials
• ISO alignment
• UN/CEFACT data models

4. Legal recognition

• Electronic transferable records laws
• Digital bill of lading recognition
• Cross-border signature validity

5. Interoperability frameworks

• Cross-jurisdiction wallet compatibility
• Credential schema alignment

9. Public vs Private Sector Roles

Public Sector

• Business registration VCs
• Export/import license VCs
• Customs clearance VCs
• Tax/VAT compliance VCs

Private Sector

• Trade finance VCs
• Insurance VCs
• Inspection VCs
• ESG & audit VCs

The system works only if both sides issue and accept credentials.

10. Why This Is Transformational (Systemic View)

Global trade currently runs on:

• PDFs
• Scans
• Email
• SWIFT messages
• Manual document checking

VCs introduce:

Programmable, portable, verifiable trust.

This enables:

• Smart trade automation
• Embedded compliance
• Near real-time settlement
• Reduced working capital lock-up

11. Longer-Term Possibilities

2. Machine-to-machine trade
   IoT + wallet-based credentials for autonomous shipping

3. Tokenized trade documents
   Digital bill of lading as transferable credential

4. Trade corridor trust frameworks
   EU–ASEAN corridor using interoperable identity frameworks

5. Global SME passport
   Portable compliance wallet usable in any jurisdiction

12. Key Risks & Constraints

• Jurisdictional fragmentation
• Competing wallet standards
• Political trust issues
• Legal non-recognition
• Cybersecurity governance
• Resistance from document intermediaries

13. Bottom Line

Verifiable credentials in interoperable wallets:

• Turn compliance into reusable digital assets
• Turn documents into programmable trust objects
• Reduce friction across borders
• Enable automated trade finance
• Improve regulatory precision
• Increase SME participation

They do for trust what containerization did for goods.