Dato’ Fadzli Shah, a Malaysian venture capitalist and technologist, notes that blockchain originated as a grassroots, anti-establishment movement via cryptocurrency, but questions how enterprises and governments utilize it today. He argues that state-backed blockchains represent the fastest, most reliable path to broader adoption. Shah, founder of MY E. G. Services (MYEG)—a Malaysian digital services firm working with government agencies—has developed Zetrix, a layer-1 blockchain targeting digital identity and cross-border trade. Zetrix is now integrated with China’s state-driven Xinghuo Blockchain Infrastructure Facility (BIF), which supports state-owned industries and multinational corporations such as SAP and Siemens operating in China. Shah’s experience includes investment in local tech startups and serving as chief strategy officer for Malaysia Digital Economy Corporation. He established Zetrix inspired by China’s model, as China is currently the only national government operating a blockchain at scale since 2020, demonstrating a viable use case for distributed ledger technology (DLT) at the sovereign level. Many countries now prefer onshore data management, prompting sovereign blockchains that require interconnection—for example, Zetrix acts as a conduit between national blockchains, serving as China’s international data gateway to support initiatives like the Belt and Road trade program. Measuring the scope and relevance of such sovereign blockchain networks is challenging due to limited published data and differing architectures. Xinghuo claims to be the world’s most active blockchain with 100 million daily blockchain identifiers—codes referencing transactions, assets, participant identities, blocks, or smart contracts—vastly surpassing public permissionless chains like Solana (6–7 million) and Ethereum (around 1 million). However, Zetrix's last reported daily cross-border transaction volume on Xinghuo was RM 25. 6 million (~$5. 4 million) in July 2022, implying an annualized trade value around $2 billion, which remains small against Solana’s potential $6 billion daily processing capability. By comparison, fintech platforms digitizing trade finance with some DLT elements—such as Mitigram, which claims to have handled $100 billion across 185 markets since 2015—show much larger volumes, though these rely more on API connectivity than pure blockchain infrastructure. Other private-sector efforts in China include Tencent’s WeBank-backed consortium FISCO-BCOS, launched in 2017 for supply chain, finance, and government services, with open-source code and backing from major state-owned enterprises like China Mobile and China UnionPay. FISCO-BCOS also integrates internationally via partnerships with Digital Asset to connect with Ethereum and other public blockchains. Public usage statistics for networks like BSN or FISCO-BCOS are not readily available. Unlike much of global DLT, these networks restrict speculative or token-based activities, focusing instead on controlled, permissioned applications. Xinghuo, governed by China’s Ministry of Industry and Information Technology (MIIT) and led by the China Academy of Information and Communications Technology (CAICT), underpins China’s blockchain ecosystem, supporting apps developed by entities like BSN. According to Shah, transaction volume alone underrepresents Xinghuo’s impact; Zetrix’s role centers on Certificates of Origin for cross-border trade, aiming to improve trade efficiency and reduce costs. For exporters to China, using Zetrix connectivity has halved port time from four to two days, cutting warehousing expenses and facilitating quicker transfer to trucks or rail, yielding up to 40% at-port cost reductions. Beyond cost savings, Xinghuo’s data tracking capabilities offer valuable insights—for example, the daily measurement of steel volumes entering Shanghai port. MYEG is collaborating with Malaysian authorities to build a sovereign blockchain for customs, trade finance, and identity management, while Shah is also engaged with Manila and Jakarta.

When multiple sovereign blockchains are operational, bidirectional onchain provenance will enable Zetrix’s full deployment and additional service offerings. Shah emphasizes that trade involves the exchange of goods, data, and money. While fintechs and banks focus on financing and payments, Zetrix concentrates on the data dimension, believing that once trade information is securely onchain, financial transactions will naturally follow—provided banks and fintechs overcome the current siloed nature of bank blockchains. Nonetheless, Zetrix does not intend to tokenize financial instruments itself but to specialize in trade service messaging. Governments are likely to pursue onchain management of trade data flows due to complex tariffs and regulations, even under regional free-trade agreements in Asia. Tokenizing trade communications offers gains in timeline efficiency and enhanced monitoring. Having China’s proven model, other regional partners are expected to replicate sovereign blockchain initiatives. However, challenges remain: Zetrix and Xinghuo are centrally controlled and not open source, necessitating bespoke integration efforts with customs systems and enterprises, along with the development and maintenance of diverse APIs. Zetrix currently operates on cloud servers in Singapore, meaning data storage location must be agreed upon by customs offices or require localized cloud solutions, which could increase user costs. Sensitive national data, such as identity numbers, poses additional complications. In China, public data definitions are broader than elsewhere, but encryption allows data visibility only to authorized parties with user consent. Beyond trade data, Shah envisions a platform for putting business identities onchain, easing regional logistics and movement. For example, a tokenized Chinese national driver’s license on Xinghuo could enable car rental in Malaysia via a QR code recognized across borders—requiring legal frameworks such as mutual recognition, though precedents like Malaysia-Singapore’s soft border exist. Concerning data privacy and sovereignty, Xinghuo is a permissioned but public blockchain controlled by the Chinese government, which has full authority over user data and infrastructure, reflecting limited decentralization. While processing 100 million daily data points, this scale also grants Beijing extensive visibility. If other governments link their trade data to Xinghuo, questions arise about reciprocity in data access and the potential hidden costs, akin to individuals sharing data freely on social media platforms. Southeast Asian nations might accept data openness to access the Chinese market, but this arrangement may not suit dealings with other regions and could centralize trade patterns around China, possibly undermining direct onchain networks between its partners. Global trade, a $30 trillion industry, is less than 1% digitized. Banks and fintechs remain locked in protective silos, hindered by rivalry and legacy investments, leaving much digital innovation to government-led initiatives like China’s massive blockchain infrastructure. Consequently, as China dominates global trade, engaging with its network—Xinghuo BIF and affiliated international partners—is expected to become essential for trading with China and its connected economies.