Overview

vLEI-Enabled Digital Promissory Notes for Trade Finance

Executive Summary

A production-ready platform delivering legally compliant electronic promissory notes (ePN-FR) under French law with vLEI identity verification and smart contract enforcement. We built an open, auditable reference implementation that automates KYB, enables role-based access, and ensures MLETR functional equivalence - solving real-world trade finance challenges while advancing vLEI adoption.

Why Now: France's new legislation (effective March 2025) recognizes electronic promissory notes with legal equivalence to paper, defining explicit "reliable method" requirements that our smart contracts satisfy.

Why vLEI: Cryptographically verifiable, globally resolvable business identities and role credentials (governed by GLEIF vLEI EGF) enable automated KYB, verifiable authorization, and cross-border interoperability.

Business Impact: Unlocks digital negotiability for trade finance, supply chain finance, factoring, and procurement - reducing settlement time from days to seconds while maintaining full legal validity.

Hackathon Goals Achieved

Integrate vLEI into business platforms - Drop-in library for ERPs to issue/hold/endorse ePN-FR with vLEI authorization

Automated KYB - LEI/vLEI verification at issuance and every transfer; only entities with valid vLEI can participate

Role-based access - OOR vLEI dictates who can bind the entity; revocation instantly removes permissions

Verifiable data sharing - ePN and credentials circulate as VCs; integrity and provenance preserved end-to-end

Government registry integration - Architecture supports vLEI-signed attestations (good standing, director authority) traveling with instruments

French Legal Compliance - "Reliable Method"

Our smart contract architecture satisfies all four requirements of Decree n° 2025-811 for electronic promissory notes:

1. Uniqueness - ControlRegistry contract ensures single exclusive holder; atomic transfers prevent double-spend

2. Exclusive Control - vLEI-verified entity ownership with on-chain control; endorsements require OOR credential proof

3. Integrity - Tamper-evident event logs + qualified e-archiving integration; SAID-based credential verification

4. Traceability - Complete audit trail on-chain; endorsement chain with cryptographic proofs; ISO 20022 payment references

MLETR Functional Equivalence - Control, transfer, and integrity primitives map directly to UNCITRAL Model Law requirements

What We Built

1. vLEI Identity & Verification System ⭐

The Foundation - Complete KERI Protocol Implementation

• Full Trust Chain: GLEIF Root → GEDA → QVI → Legal Entity → OOR
• KERI Client: Complete implementation with 5 witness network
• ACDC Credentials: All 4 credential types (QVI, LE, OOR Auth, OOR)
• IPEX Workflows: Grant/admit credential exchange
• Challenge-Response: Cryptographic identity verification
• KEL Validation: Key Event Log integrity checks

Why This Matters: vLEI enables cryptographic proof that individuals have authority to act on behalf of organizations - essential for legally binding electronic notes.

2. Electronic Promissory Notes (ePN-FR)

• Issue notes with 4-step wizard and KYB verification
• 7 lifecycle operations (Endorse, Pledge, Present, Payment, Dishonor, Cancel, Release)
• Real-time dashboard with role-based filtering
• Complete endorsement chain tracking
• Blockchain-anchored audit trail

3. Smart Contract Architecture

• Three-Contract System per note (NoteCore, ControlRegistry, vLEIAuth)
• State Machine Enforcement - Invalid transitions prevented
• Event Logging - All 9 event types recorded on-chain
• vLEI Authorization - OOR verification for all operations

4. Standards Compliance

• 5 ISO Standards: 17442 (LEI), 4217 (Currency), 8601 (Date/Time), 3166-1 (Country), 20022 (Payments)
• vLEI EGF v1.0: Complete ecosystem governance
• French Regulations: MLETR functional equivalence

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Core Capabilities

vLEI Identity System ⭐

Full 5-Level Trust Chain Implementation

• KERI Client with 5-witness network for fault tolerance and duplicity detection
• Complete Trust Hierarchy: GLEIF Root → GEDA → QVI → Legal Entity → OOR (Official Organizational Role)
• 4 Credential Types: QVI credential, Legal Entity vLEI, OOR Auth credential, OOR credential
• IPEX Protocol: Grant/admit workflow for credential issuance and acceptance
• Challenge-Response: Cryptographic verification preventing replay attacks
• KEL Validation: Complete key event log integrity checks with witness receipts

Result: Cryptographic proof of organizational authority for legally binding signatures

Electronic Note Issuance

Automated KYB & Deployment Pipeline

• Real-time KYB: LEI verification and vLEI credential validation (< 5 seconds)
• 4-Step Term Sheet: Party information, instrument terms, optional references, deployment
• 3 Instrument Types: Standard ePN-FR, invoice-linked, supply chain finance variants
• Smart Contract Deployment: Automated 6-step deployment (~30 seconds)
  • NoteCore state machine
  • ControlRegistry for exclusive holder logic
  • vLEIAuth for role verification
  • Contract linking and permission setting
• ISO Compliance: ISO 4217 currencies, ISO 8601 dates, ISO 20022 payment references

Result: Blockchain-deployed note with unique ID, vLEI-gated authorization, complete audit trail

Lifecycle Management

7 Full Operations with State Machine Enforcement

• Endorse (Transfer): BLANK/SPECIAL endorsement types, atomic holder updates, chain tracking
• Pledge/Release: Collateral locking mechanism, pledgee rights, transfer prevention during pledge
• Present: Maturity-gated presentment requests with maker notification
• Record Payment: ISO 20022 payment reference linking, final settlement
• Dishonor: Payment failure recording with legal remedy triggers
• Cancel: Mutual cancellation with multi-party consent

Dashboard: Real-time filtering (role, status), search (ID, party, amount), multi-tab detail view (terms, history, actions)

Result: Complete note lifecycle from issuance to settlement with full legal compliance

Blockchain Architecture

3-Contract System Per Note

• NoteCore: State machine enforcing valid transitions (9 states), event logging (9 event types), immutable history
• ControlRegistry: Single exclusive holder guarantee, atomic transfers, pledge lock mechanism
• vLEIAuth: OOR credential verification, challenge-response protocol, KEL validation, trust chain verification

Integration: Every operation requires vLEI authorization; unauthorized actions blocked at contract level

Result: Legally enforceable "reliable method" with cryptographic guarantees

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Technical Implementation

Production Architecture:

• Next.js 14 with TypeScript 5.4+ strict mode
• Prisma ORM with 12-entity relational schema
• 18 type-safe API endpoints with Zod validation
• 8 state management stores with persistence

Database Design:

• 12 main entities with complete relationships
• Endorsement chain tracking with sequence numbering
• Pledge management with lock mechanisms
• Event logging (9 event types) with JSONB flexibility
• ISO 20022 payment reference integration
• Verifiable credential storage

API Design:

• Note lifecycle endpoints (issue, endorse, pledge, present, payment, dishonor, cancel, release)
• vLEI verification endpoints (challenge generation, OOR verification)
• KYB automation (LEI lookup, credential validation)
• Real-time state synchronization

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Standards Compliance

ISO Standards

Fully Implemented:

• ISO 17442 - Legal Entity Identifier (20-char validation)
• ISO 4217 - Currency codes (3-letter codes)
• ISO 8601 - Date and datetime formats
• ISO 3166-1 - Country codes
• ISO 20022 - Financial messaging (pain.001, pacs.008, camt.054)

vLEI Standards

Complete Implementation:

• GLEIF vLEI EGF v1.0
• KERI Protocol v2.60
• ACDC v1.0 (Authentic Chained Data Containers)
• IPEX (Issuance and Presentation Exchange)
• All credential types (QVI, LE, OOR Auth, OOR)

French Regulations

ePN-FR Compliance:

• "Reliable method" requirements
• MLETR functional equivalence
• Non-repudiation via vLEI signatures
• Complete audit trail
• Electronic signature support

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Key Differentiators

1. Legal Innovation - First implementation satisfying French Decree n° 2025-811 "reliable method" requirements with cryptographic guarantees

2. Complete vLEI Stack - Full KERI + ACDC + IPEX implementation with 5-level trust chain (GLEIF → GEDA → QVI → LE → OOR)

3. Smart Contract Rigor - 3-contract system per note enforcing state machine integrity, exclusive control, and vLEI authorization

4. Standards Convergence - 5 ISO standards + vLEI EGF v1.0 + MLETR functional equivalence in single platform

5. Production Quality - TypeScript strict mode, Zod validation, type-safe database operations, comprehensive error handling

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Impact & Use Cases

Trade Finance - Digital negotiable instruments reducing settlement from days to seconds

Supply Chain Finance - Invoice-linked notes with automatic maturity calculation

Factoring - Endorsement chain tracking with pledge/collateral support

Cross-Border Payments - ISO 20022 integration with verifiable party identification

Regulatory Compliance - Complete audit trail satisfying French law, MLETR, and banking regulations

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Platform: Next.js 14, TypeScript, Prisma, KERI, vLEI Standards: ISO 17442, 4217, 8601, 3166-1, 20022, vLEI EGF v1.0, MLETR Compliance: French Law (Art. L512-1-1, Decree n° 2025-811)