Global identity: the missing layer in digital trade and payments? - Trade Treasury Payments

Supply chains have never been more digitised or more scrutinised. As goods move across road, rail, air, and sea, data too now moves through platforms, portals, systems, and registries. Yet, despite the vast (and quickly growing) amounts of data flows, there is a glaring gap in the ability to confirm exactly who is on the other end.

The result is a mismatch between the volume of data and the certainty it provides. Platforms capture more information than ever, but counterparties are still matched on text fields that are easy to mistype and hard to reconcile. Without a shared reference, the data cannot carry trust.

What is missing is a globally recognised system of identity. A way for businesses to prove who they are across any border or platform. The Legal Entity Identifier (LEI), and its verifiable digital counterpart, the vLEI, are two tools that will be able to help.

Lessons from capital markets

The LEI was created in the wake of the global financial crisis, when the G20 tasked standard-setters with improving transparency in derivatives markets. Over a decade on, the programme has delivered exactly what it set out to do in its initial domain. “We don’t have an adoption gap in the initial use case of the LEI, which was capital market… Now we have 3 million LEIs that covers all needs in that space,” Alexandre Kech, CEO of the Global Legal Entity Identifier Foundation (GLEIF) told Trade Treasury Payments (TTP). That track record shows that when identity is standardised and embedded in regulatory processes, adoption follows.

But scale also matters. As of mid-September 2025, the Global LEI Index records just over 3.05 million LEIs issued worldwide, with over 93% of these (~2.85 million) active. Quarterly updates from GLEIF show signs of continued momentum, with roughly 93,000 LEIs issued in Q2 2025. The LEI is overseen by the Regulatory Oversight Committee (ROC), which is a network of more than 65 public authorities and 19 observers from over 50 countries, designed as neutral body acting in the public-interest.

That neutrality is ever more important in the context of geopolitics, where infrastructure that is perceived as politicised will struggle to receive universal adoption. the design of the LEI system reduces political sensitivities since it maps to domestic identifiers rather than replacing them. 

This scale, across all but the most reclusive of the world’s governments, is an indication that the global identifier that has already proven itself in a complex, multi-jurisdictional market. With the technology in place, it can be repurposed in any application where identity is the bottleneck. Which brings us to cross-border payments.

Payments under pressure

Cross-border payments have been a G20 priority since 2020, with targets to cut cost, raise speed, and improve transparency and access by 2027. The FSB’s consolidated roadmap makes clear that better data (meaning structured, consistent, and machine-readable) is essential to meeting those goals. The BIS-CPMI’s twelve harmonised ISO 20022 data requirements translate that objective into message-level practice, providing a consistent way to populate originator and beneficiary information, references, and remittance data so payments can move without breaking. Central banks, including the Bank of England, have indicated that aligning to these requirements should lift straight-through processing and reduce exceptions, which is the heart of the operational pain for banks and corporates today.

And what will you find sitting at the root of many of those exceptions? Identity. 

FATF’s revised Recommendation 16, which was updated in 2025, tightens some of the transparency obligations around sending and receiving funds and it also clarifies many of the responsibilities across the payment chain. The explanatory note associated with the FAFT recommendations makes clear the orgnisation’s stance that richer, standardised information must accompany cross-border transfers so institutions can screen efficiently and investigators can access what they need. FATF’s glossary explicitly recognises the LEI (ISO 17442) as a legal-entity identifier. 

Kech explained the consequences of relying on names and addresses alone. “Today… trying to reconcile names and addresses… leads to false positives, STP breaks, [and] inefficiencies…. Around 3 to 4% of payments not going through globally because of that challenge of identification.” For banks and treasurers, those breaks show up as investigation queues, delayed value dating, needless re-screening, and elevated costs. Embedding a structured legal-entity reference such as the LEI into ISO 20022 messages does not eliminate due diligence, but it reduces ambiguity, which could be the difference between a near-match on a name and a confirmed match on an identity anchored in reference data.

There is also a low-friction way to begin. GLEIF’s Validation Agent model allows banks and regulated firms to issue LEIs to clients during onboarding, avoiding duplicate processes and making adoption incremental. That channel has expanded over the years, giving institutions a straightforward way to incorporate LEIs into payment and customer data without re-engineering front-to-back. 

Trade and supply chains

If payments are where structured identity can remove immediate friction, trade is where global discoverability can unlock longer-term efficiencies. The WTO–ICC Standards Toolkit for Cross-border Paperless Trade lists the LEI (ISO 17442) among the identifiers recommended for digital trade. 

Kech said, “On trade, there is more an industry will to adopt. And there we have the support of the ICC… It will take years, but there’s a clear agenda to go towards that adoption.” That “industry will” is an important piece. Much of trade remains document-heavy and jurisdiction-specific. Platform providers and banks are connecting digital islands, but the underlying question (i.e., can counterparties be identified and verified the same way in every jurisdiction and on every platform?) cannot be resolved without a common identifier.

For corporates and SMEs, the business case lies in the reality that an LEI travels with the entity across banks, platforms, and borders. When used consistently, it reduces re-keying and helps counterparties verify who they are dealing with using a single, open, and trusted dataset. That is especially relevant for markets where company registries are incomplete or difficult to access. Importantly however, the LEI does not replace domestic identifiers. “It’s always an ‘and’, not an ‘or’… we complementing existing identifiers… we don’t replace them,” Kech explained.

Interoperability across domestic and regional schemes is also a policy priority. The WTO has advised governments to avoid siloed digital identity ecosystems that cannot be recognised across borders and instead leverage international initiatives for mutual recognition. In practice, that is the difference between a number that works on a local portal and an identity other jurisdictions can query, map, and trust.

VLEI as a digital passport

The vLEI (vfor verifiable) extends the LEI by enabling cryptographic proof of identity for both organisations and authorised representatives on digital platforms. That capability is becoming increasingly relevant as more processes (from account opening and supply-chain onboarding to the exchange of verifiable credentials between banks and corporates) move online. “vLEI… enables organisations to prove who they are on digital platforms, cryptographically and verifiably… It could support fraud prevention, impersonation prevention, and cybersecurity,” Kech said.

The timing aligns with the ISO 20022 data harmonisation push in payments. As the new standard makes messages richer and more structured, attaching a verifiable credential that confirms an organisation’s identity and a person’s authority to act on that organisation’s behalf is a natural next step. This can be achieved if identity becomes portable, verifiable, and easy to consume across systems that speak the same data language. The WTO–ICC toolkit’s emphasis on identifiers and metadata (combined with growing alignment on message semantics) creates the context in which verifiable credentials can do practical work rather than sit as parallel infrastructure. 

Kech said, “It will progressively become something that is natural to get. A little bit like you get a passport… for businesses doing cross-border stuff… you will either be asked to get an LEI or see the benefits to get one.” A basic LEI is low-cost by design and, per the Regulatory Oversight Committee’s rules, issuers must operate on a cost-recovery basis rather than a profit motive. 

Industry next steps

With the foundations for a truly global scale set, the industry’s next step is to execute on the vision and find a way to make these standards work at scale. Given that the G20 cross-border payments roadmap run to 2027, and central banks and market infrastructures are aligning to the CPMI’s harmonised ISO 20022 requirements on a similar horizon, the next two years will be particularly important for the future of digital identities.

Trade and finance have progressed through shared references that reduce ambiguity and enable scale, from bills of lading and the Uniform Customs and Practice to IBAN and BIC. A consistent legal-entity reference, and a verifiable credential when digital channels require it, is the next layer in that lineage. Used everywhere, albeit behind the scenes, it turns digitisation into reliability at scale and leaves fewer opportunities for error, delay, or impersonation. 

That is the opportunity now within reach.