Dubai’s Digital Silk Road modernizes trade with Hyperledger Fabric

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Testing with a local payment system

The Digital Silk Road was not the first government system in Dubai to be modernized with blockchain. In 2018, the city-state updated its payment system. Citizens paid for everything from electricity and water to parking permits and dog licenses through various payment portals.

Reconciling and settling these payments was slow and labor-intensive. Staff first needed to sort through payments collected from different portals. Then they had to manually deduct fees due to each department. Finally they could transfer the remaining amounts to the relevant Authority. But this end-to-end process took up to 45 days.⁵

The new Reconciliation and Settlement System does all the same work in an instant. The system operates across 40 entities and 15 banks. This saves weeks of staff time and gives real-time visibility into Dubai’s revenues.

Each of the organizations on the platform had its own project management and security teams. This increased the complexity of the project and its coordination–making it a perfect test drive for the even more intricate Digital Silk Road.

Start building with a trusted partner: Avanza

Dubai Chamber and DP World wanted to partner with a developer with a deep understanding of blockchain and software development, who could design and deliver projects of this size. And they wanted a partner with knowledge of Dubai, its authorities, and its agencies.

Avanza Innovations was a natural choice. The company had already partnered with the Smart Dubai Office for the Reconciliation and Settlement project. So Avanza had proven it could design and deliver complex blockchain projects for Dubai.

For the Unification of Trade Registration and the Export Authorization projects, Avanza wanted a mature, tested blockchain platform.

So it chose Hyperledger Fabric, the open source blockchain framework from the Linux Foundation, which had demonstrated it could handle production-grade transactions. The same platform was already supporting Dubai’s Payments and Reconciliation System.

As a private, permissioned network, Hyperledger Fabric has the advanced security required for sensitive trade. It offers smart contract support in multiple programming languages. And it provides a choice of optimized consensus algorithms. The choice of platform was recommended by Avanza, since they saw it as the most mature blockchain platform. It also helped that the Smart Dubai government was already working with Hyperledger Fabric and was heavily supporting it. Both the DP World and dubai chamber decided that doing use cases on Hyperledger Fabric would help them integrate and onboard other entities in a seamless manner.

Opening the on-ramp to the Digital Silk Road

Testing the first two projects for the Digital Silk Road began in late 2019 and they went live in January 2020.

“Before, the process was fragmented and repetitive,” says Waqas Mirza, CEO of Avanza. “Updates didn’t happen in real time. And it was hard to scale to add business units and authorities.”

With the Unification of Trade Registration, a company wanting to do business in Dubai can register once, through a secure, single-window interface. The data gets distributed across all government trade entities. And if the company needs to update any information, the new information is instantly shared by all.

Export Authorization tracks trade transactions, reduces transaction time, and enables secure, encrypted digital authentication. Seamless documentation sharing with relevant government entities happens through smart contracts. Compliance and regulatory checks happen throughout the process, which is completely paperless.

Export Authorization

“Dubai Chamber is proud to be the first chamber in the world to adopt and offer state-of-the-art blockchain solutions that simplify trade, improve ease of doing business and enhance economic competitiveness. This technology introduces plenty of far-reaching benefits for our members and regional partners, while it also has the potential to revolutionise the global trade landscape,” said HE Hamad Buamim, President & CEO of Dubai Chamber of Commerce and Industry and Chairman of the ICC – World Chambers Federation (WCF)

“With the new platforms, there is a seamless user experience,” says Ali Safri, Global Head of Presales and Innovations at Avanza Innovations. “All entities receive updates at the same time—there are no gaps in the data. And the entire system can scale easily and efficiently.”

Continuing on down the road

And the Digital Silk Road intends to scale up the system.

Additional blockchain networks to address other governmental processes are in the works, to further the Digital Silk Road’s registration and paperless processes. Smart contracts can move data from one platform to another.

Speaking about the Digital Silk Road strategy, Buamim said: “We have been able to develop a project that is aligned with the vision of the initiative and meets Dubai’s need for a platform that facilitates more cost-efficient, safer and faster trading. We can avoid all obstacles and unnecessary procedures and enhance our role as a trading chamber by using the latest technologies such as blockchain.”

In the future, the Digital Silk Road will make cross-chain connections with complementary platforms that handle trade financing, private business directories, and personal digital services.
Staying 10 years ahead of other world cities is an ambitious plan. With the help of Avanza and Hyperledger Fabric, Dubai has a solid foundation to support a modernized, digital marketplace and trade center. And the Digital Silk Road will bring Dubai closer to its 10X destination.