Victor Ugochukwu · Dec 14, 2020 . 5min read
Standard Chartered Concludes its First Blockchain Cross Bank LC Transaction on Contour Network
Leading International bank, Standard Chartered bank completed its first cross bank LC transaction using blockchain for Trade Finance.
By Komal Joshi · Sep 11, 2020 . 6min read
According to a blog post, Standard Chartered today concluded its first cross-bank Letter of Credit (LC) transaction between Vietnam and Thailand using blockchain technology. It completed the transaction in collaboration with Asian Development Bank (ADB), Bank for Investment and Development of Vietnam and Standard Chartered Bank (Thai).
ADB provides guarantees and loans to promote trade in Asia and the Pacific. It has been a resilient and innovative vehicle for ADB assistance during the coronavirus disease (COVID-19) pandemic. It has supported 3,960 transactions worth $2.8 billion in Q1, 2020, up from 2,363 transactions in the same period of 2019. This year’s transactions involved 145 related to medical supplies and more than 450 for food and agriculture-related products. Standard Chartered Bank serves as one of the leading international banking group. It presents the world’s most dynamic markets. It intends to drive commerce and prosperity via its unique diversity.
Nuances about the Standard Bank’s First Cross Bank LC Transaction
ADB worked jointly with Standard Chartered Bank on this pilot. The transaction financed a $50,000 shipment of plastics from Thailand to Vietnam in August and was backed by Contour Pte. Ltd. It is a Singapore-based company that promotes trade finance digitization. Contour promotes data transparency, eliminates administration costs, and decreases friction in global trade. Contour network assists in simplifying the LC process.
With the help of blockchain, a transaction can occur in real-time and is strengthened concurrently to each participant. Moreover, it displaces face-to-face exchanges of various documents over several days. Furthermore, trade finance usually is a paper-intensive and time-consuming process. Digitizing LC issuance reduces processing time straight from five days to about seven hours. The first cross-bank LC transaction moreover flags the way for more banks and corporates to collude on innovative technology that can boost the growth of trade.
Earlier, Standard Chartered Bank triumphantly executed its first blockchain transaction by issuing an LC (Letter of Credit) for the garment exporter, Viyellatex Ltd., via Contour network. Moreover, Standard Chartered Bank acted as the issuing Bank for the applicant and the advising Bank for the LC’s beneficiary.
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