Quick Intake
One more use case on Contour – Blockchain-based LC issuance platform.
With the increase in the number of countries and banks accepting this Immutable technology and processing trade finance applications on the top of the blockchain, it is quite appropriate to say that the adoption of blockchain is growing leaps and bounds day by day.
Well, Here in the use case, ADB – Asian development bank has issued an LC worth $50000 over the DLT platform called Contour
Earlier we have seen many banks issued the LC’s on the said platform from various countries like Oman, Singapore, etc
The objective of Contour is to Build a global network of banks, corporates and digital document solutions, all connected on one decentralized platform
Imagine the documents involved and the time it takes to get an LC from the banks. Some times the average time ranges from 15 days to 1 week at least.
Moreover its the trust element that is verified by the banks involved in this process on either side to check the authenticity of documents submitted by the parties to the banks.
Now comes the Game changer – where the banks as well as the trading parties will be assured of trust and become more accountable to their acts and deeds when they are dealing on the top of blockchain kind of Immutable platforms.
The LC issue process has come close to 1 day or even less than that!
FYI – Standard Chartered was one of the Contour network founders alongside six other banks Bangkok Bank, BNP Paribas, CTBC Holding, HSBC, ING and SEB. Since then, several others have joined, including Citi, DBS Bank, Vietnam’s HD Bank, Saudi SABB and SMBC.
The network uses the R3 Corda enterprise blockchain and is currently in beta testing mode
Happy Reading…
Today the Asian Development Bank (ADB) announced the completion of a credit guarantee transaction using distributed ledger technology (DLT) for a $50,000 shipment of plastics from Thailand to Vietnam. The pilot used the Contour Letter of Credit blockchain, formerly called Voltron.
Standard Chartered worked with the seller Thailand’s SCG Plastics for trade finance and the buyer was Vietnam’s Opec Plastics, a client of the Bank for Investment and Development of Vietnam’s (BIDV).
“The coronavirus pandemic underscores the need for the trade finance industry to digitize operations,” said ADB’s Head of Trade and Supply Chain Finance Steven Beck. “This innovation makes trade more efficient, reduces risk, and lowers barriers to entry for small and medium-sized businesses in developing Asia.”
And Ozzeir Khan from ADB’s IT department noted that “we are seeing trade networks using this technology to increase trade volumes and reduce complexity.”
The ADB is a regional development bank modeled on the World Bank in which the largest shareholders are the U.S. and Japan with 15.6% each, and the presidents have always been Japanese.
The trade guarantee is part of the ADB’s Trade and Supply Chain Finance Program. During the COVID-19 pandemic it has supported $2.8 billion of trade in the first half of 2020. The number of transactions is 67% up on the same period in 2019.
An additional feature that was used during this transaction was the sell down feature of Contour, which enables the bank to transfer the risk.
Standard Chartered was one of the Contour network founders alongside six other banks Bangkok Bank, BNP Paribas, CTBC Holding, HSBC, ING and SEB. Since then, several others have joined, including Citi, DBS Bank, Vietnam’s HD Bank, Saudi SABB and SMBC. The network uses the R3 Corda enterprise blockchain and is currently in beta testing mode.
