The REGTECH Book

Dissolving Barriers: A Global Digital Trust Protocol

By Ankit Ratan

Co-Founder Signzy

In a globalized world, the need to be able to trust parties across borders cannot be understated. Any party when undertaking a transaction in a foreign jurisdiction takes an additional business and compliance risk. Thus in cross-border transactions, the due diligence takes months to complete, increasing not only the time but the cost, to the extent that it can determine the business decision itself when weighed against the size of the entire transaction.

To understand how tough it is to carry out a cross-border transaction, let’s go through the process once for illustration:

In a cross-border transaction taking place between two parties in the United States and India, the US party would hire a US law firm A and the Indian party will hire an Indian law firm A to ensure that the transaction complies with the local regulatory regime. Since the two parties do not trust each other, they will, in turn, hire lawyers in the other jurisdiction, i.e. the US law firm will hire an Indian law firm B, and the Indian law firm will hire a US law firm B.

That simple example shows how a single transaction now involves four law firms. This means time and cost escalations, which increasingly restrict such cross-border transactions.

A global digital trust system should allow multiple parties in different jurisdictions to transact through a single platform. It should also ensure that the transaction is meeting ...