The Bangladeshi branch of global banking company HSBC carried out the country’s first blockchain-based letter of credit (LC) transaction on the Contour DLT platform.
With the transaction, the import of 20,000 tons of heating oil from the subsidiary of was processed United group in Singapore, United Mymensingh Power.
The CEO of HSBC Bangaladesh, Md Mahbub ur Rahmandescribed the transaction as a sign of the bank’s commitment “Support cross-border trade with most modern technological platforms “.
“I believe this will usher in a new era of international business transaction routing as companies and governments recognize the transparency, security and speed of getting things done using blockchain technology.”
The global payment service SWIFT estimates that Bangladesh operates with LC were worth more than $ 34 billion in the first half of 2020.
By using blockchain technology The time required to process the transaction has been reduced from five to ten days to less than 24 hours. The managing director of the United Group, Moinuddin Hasan Rashisaid:
“Fuel oil LCs are very time sensitive, where every second counts. We believe that blockchain technology will help manage time efficiently while ensuring greater efficiency and better cost management.”
contour is a blockchain platform built with Corda from R3 connects financial institutions and companies in a “decentralized trade finance network”.
Contour is owned by eight financial institutions. including HSBC, ING, Citi, Bangkok Bank, BNP Paribas, Standard Chartered, SEB and CTBC. Development of the platform began in mid-2017 with the name “Voltron” before it was started in closed beta the following year.
Eighty different companies from 17 countries tested Contour ahead of the commercial beta launch in early 2020. The platform just ended beta a month ago.
Contour was also used to handle a 176,000 iron ore trade between Malaysia and China.The Philippines-based Asian Development Bank also used the platform to conduct the first cross-border LC blockchain transaction between Vietnam and Thailand.