Q: How do you explain that?

It could be the result of self-selection. The SMEs we are working with tend to be at the lower end in terms of annual revenue and be domestically focused. The services sector that we work with, restaurants and hair salons, are also domestic in nature.

But there are no restrictions when it comes to cross-border. The same model can apply. If you have a community of businesses on the platform, their location does not matter if they have transaction capability enabled by the tokenization of trade credits.

Q: Wouldn’t the system be constrained by regulations?

The system has a very narrow purpose – tokenizing the trade credits. You treat it as just another mechanism. An invoice and purchase order are still required but when accepted are simultaneously converted to tokens and can be used immediately rather than waiting for a payment.

We should spend more time with the regulators demonstrating the model to keep in mind that we are not a currency. We cannot speak for regulators and how they would like to treat the tokenization of trade credits. We are merely digitizing an accounting treatment that already exists.

Q: How do you scale it up for cross-border trade?

We would like to demonstrate for a specific corridor or industry. Then our efforts would be more focused. Prior to the political situation, we were in discussion in Myanmar to form a national B2B marketplace as a first step. The marketplace would then be connected to major trade partners, for example, Singapore.

For partners like China, we want to look at specific sectors such as agriculture or the garment sector, on which a significant part of the Myanmar economy is dependent. They would need to source materials from other countries and sell to traders here in Singapore

and Europe. We want to establish those trade corridors for the platform – buyers can then assess the quality of suppliers from Myanmar. Smaller suppliers can also aggregate their selling capacity to bid for contracts that cannot be bid on an individual basis.

Countries like Malaysia, Indonesia and the Philippines can establish platforms for specific sectors. For example, a community of mango producers in the Philippines would include mango producers, processed food producers, shippers, and traders. Then we look for mango purchasers here in Singapore.

We want to pick specific corridors and industries and demonstrate the value. We want to identify the right partners. That is how we want to scale. We have big ambitions that require a lot more resources. It is better to move forward in phases.

Q: Where do you see Kashtec in ten years?

Amazon started as a bookseller that digitized the experience for the customer. It has evolved. Similarly, we want to start with the narrow – the tokenization of trade credits. In ten years, if we do not expand into other areas, we would be a regional ecosystem that enables the supplementation of SME financing. If we can take just a part of ASEAN’s US$300 billion funding gap, it will go a long way toward creating many more jobs and supporting a lot more families.

The scale of the problem is so large that there must be more than one player. We would be bubbling over with joy if we could be a part of that journey.

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Read more from the Future of Trade Interview Series:

Pent-up demand makes way for durable economic recovery in APEC region