By: Carter Hoffman, TTP

So, what came first, the chicken or the egg?

It is a question that goes back at least as far as the ancient Greeks, and one that gets debated far more seriously than it probably deserves. In a way, it is timeless.

But one of the reasons it has endured and evokes wonder among philosophers and stoners alike is that what it is describing is a loop. One thing seems to depend on the other, while the other also seems to depend on the first. The loop it creates is one that can make sense only once the system is in motion. But what came first? With each relying on the other, how does the loop start? 

Digital trade has its own version of that problem, and the result is a system that is still, in 2026, far more paper-dependent than it should be.

And perhaps it is this modern version of the age-old chicken-and-egg problem that helps explain why digital trade, something that seems so obviously better than the status quo, is taking so long to actually happen.

The chicken and egg of digital trade

For years, the trade industry has been hearing banks say they will invest in digital tools once their clients are ready, while companies say they will change to digital processes once their banks and counterparties are ready. But what comes first? 

It is easy to understand how this can be an issue when you pause and remember the sheer number of different players that it takes to make trade happen. Even a typical transaction will involve the exporter and the importer and each of their banks and the carriers and the insurer and the customs authorities of at least two countries, not to mention any number of software providers that each of those myriad stakeholders has decided to use. 

Why would any one party in this chain decide to bear the cost and effort of digitising if they won’t realise many of the benefits until everyone does as well? If only one of them digitises and the rest stay with paper, then paper documents will still have to be checked, printed data fields re-entered and verified, and physical envelopes sealed and couriered. Where would be the benefit of all that digital? But, if all of these stakeholders are too chicken to make that first move, how will we get any eggs!?

That’s not to say that there aren’t signs of progress. The Digital Container Shipping Association said that, as of 2025, around 11% of bills of lading were issued electronically. While that is a positive sign and well above the 1% reported in 2021, unfortunately, it also means that nearly nine out of ten bills of lading today are still being printed on sheets of paper and physically carried from one place to the next. 

For years, this lack of widespread adoption has been taken as proof of the problem itself. If digital trade is not scaling, it must be because no one is willing to go first. That is the chicken-and-egg logic. But the facts are starting to complicate that view. 

Perhaps the old problem is fading

There is now evidence to suggest that the system has, indeed, begun to move. 

Michele Sancricca, founder and CEO of Secro, a digital trade platform, said, “The most counterintuitive and frankly stunning shift I have witnessed is that banks, historically the industry’s most formidable gatekeepers… have become our most enthusiastic enablers.”

The old understanding when it came to digital trade was always that the banks would be the last to move, but it seems that this may no longer be the case. Sancricca certainly thinks we are past that point, adding that “digitising six billion dollars’ worth of shipments in a single year is not a footnote. It is proof that the tipping point is … happening now.”

Perhaps, then, with banks on board, we are past the sticking point at the very beginning of the digital chicken-and-egg loop. If this is the case, then the core question the industry needs to address is no longer around why digital adoption has not started, but around why it has not spread. Maybe now, the main challenge is that different participants do not see the benefits in the same way, or do not believe they will share in those benefits fairly. 

Each participant is solving a different problem. For example, a bank is largely focused on risk and capital, while a trader is likely most concerned with cost and speed, and a carrier is dealing with the logistics of it all. Each of these counterparties, then, is going to see the same change through a slightly different lens. Digitisation may reduce risk for one while requiring new processes for another. Or it may deliver benefits that arrive much earlier for one than they do for the rest. The value is real, but it is not always evenly distributed, and it is not always immediate. Sancricca said, “The single most important lesson I have learned is that technology is rarely the real barrier. The real barrier is misaligned incentives.” 

With banks no longer waiting on the sidelines and digital transactions already underway, it seems plausible to believe that we now have our first chickens and our first eggs, and the system is in motion with plenty more of each to come. This doesn’t mean there aren’t challenges ahead still (no one claims chicken farming is easy), but those challenges are now centred around making sure that digital change, and the value that comes with it, works for all who are involved.

Or perhaps there is another way to look at the problem

But there is also another view about the state of the digital trade industry.

While it is hard to deny that there has been movement in the space, there is a camp of thinkers who reject the idea that the ecosystem, as it exists today, is even ready for scale. The argument here is that the state of digital trade today still resembles an earlier era of computing, when documents created on one system could not easily be shared with another. 

Oswald Kuyler, a Senior Digital Trade Advisor at the Asian Development Bank, said, “The reality of that time period was if your company bought a bunch of IBM computers and you created documents, you could not share those documents with people running on Apple or people running on Microsoft… there was no interoperability.” 

The solution that was created at the time and exists in that space today was to create shared formats that allowed different systems to work together. Standards like rich text format and later PDF made it possible for documents to move freely between these different systems, without requiring everyone to use all of the same tools all the time.

The crux of the argument here is that, when it comes to digital trade, the industry has spent too long trying to solve the problem through separate platforms rather than through shared interoperability. Kuyler said, “27 years ago, it wasn’t legal to create an electronic bill of lading… so we had to, as a first step, create a platform… with a private law contract… so that if something happens, the two of us can walk into a courtroom.”

Today, though, a growing number of jurisdictions have adopted or are adopting frameworks based on the UNCITRAL Model Law on Electronic Transferable Records (MLETR), which recognise digital trade documents as legally equivalent to paper (provided certain conditions are met). 

“Now that we have a model law… we no longer need a platform for us to exchange electronic versions of the record… I can walk into a British courtroom and actually use the digital version, as long as I can prove singularity and control,” Kuyler said.

“We solved the reason as to why we needed platforms,” he added, “but we’re still [building] platforms.” What this means is that too much of the market, in Kuyler’s view, still works like a set of digital islands. One company chooses one platform. Another chooses a second platform. A carrier chooses a third. A bank is then expected to either connect to all of them or to persuade all its clients to use the same one. 

Compounding this is the fact that trade documents are used in many different use cases. “A platform for shipping documentation is designed around that use case, but the underlying documents are used for more than just shipping,” Kuyler said. “Are we expected to replicate subsets of the documents for each individual use case?” That may produce pilots and isolated wins, but it does not produce system-wide scale. Today, so the argument goes, this once-necessary platform-based model may just be making trade more fragmented.

The industry keeps telling itself the remaining issue is demand, when the deeper issue may be that there is still no universally workable thing to adopt. While that view may sound uninspiring, the facts around scale do give these frustrations some force. The DCSA’s 11% electronic bill of lading figure is real progress, but it is still a small minority of the total. And the wider system remains under strain. The Asian Development Bank’s latest trade finance gap survey said the global gap remained at $2.5 trillion in 2025, 66% larger than the $1.5 trillion first estimated in 2015. Clearly, the market is still very far from a world where digitisation has solved the access and efficiency problems it has long promised to address. 

Without fundamental, infrastructure-level change, this second view of digital trade asserts, there can be no system-wide scale.

The real disagreement is about what counts as readiness

So far, we’ve taken a look at the chicken-and-egg problem of digital trade, and we’ve explored two different claims relating to it. One claim asserts that said digital chicken-and-egg problem is actually now a problem of the past, as banks are starting to become advocates for digitisation and more trade transactions are taking place in the digital realm. The other argues that celebration is still premature, as the underlying infrastructure is too fragmented and incomplete for digital trade to scale in a system-wide way.

Perhaps it is possible that these two views are both true at the same time, because, in a way, they are measuring different things. One is looking at whether the system has started to move, and on that front, it clearly has. The other is looking at whether the system is ready to move at scale, and that is a much higher bar. 

Progress in isolated transactions or among leading institutions does not necessarily translate into a system that works seamlessly across all participants. In segments dominated by large institutions, for example, it is increasingly plausible that the question is no longer how to get the system started, but how the gains from that movement are shared and incentives aligned across participants. 

But most firms are not big and probably don’t even care about joining a coordinated digital ecosystem. They are just trying to perform the most basic of business activities, such as issuing invoices, sending documents, and getting paid. If doing so requires onboarding onto multiple platforms, managing different interfaces, and learning separate rulebooks, then it’s hard to argue that the system has simplified trade. 

In that sense, the system may have moved beyond the point of needing someone to go first, while still falling short (so far) of the conditions required for widespread adoption. But that initial movement may be precisely what is needed to expose the limitations of the current system. As more banks and traders attempt to operate digitally, the inefficiencies of fragmentation will become harder to ignore. That, in turn, can create the commercial pressure that will eventually hatch a robust solution to the underlying infrastructure problem. 

Beyond the old chicken and egg

So is the chicken-and-egg problem in digital trade over?

It is certainly the case that we are no longer dealing with the same problem people were describing a few years ago. The older version of the story was that nobody wanted to go first, but that is less true now that the law, some banks, and some traders have all moved in the digital direction. 

The newer version of the problem, however, is perhaps harder. It asks whether the market is building the kind of infrastructure that can spread beyond pilots and turn digital trade into the kind of humdrum status quo that no one even bothers to talk about anymore. That should be the end goal of all this effort after all, right?

Trade and finance usually change in two stages. First comes the period of innovation, when a new and exciting idea sets out to prove that it can work. Then comes the harder period, when the system has to become ordinary enough for other people to use without thinking too much about it. The first stage gets attention, but it is the second stage that dictates whether the change lasts.

Digital trade looks to be entering that second stage now. The question is no longer whether the chicken came first or the egg. What we should be asking now is whether the yard they are standing in is finally being built properly.