Quick Intake
Hello all, In this article, Let’s see about the CONTOUR blockchain platform which is founded by a consortium of global banks for providing trade finance over the blockchain.
The project went live in Singapore today (28th Jan 2020) and has drastically reduced the LC time from 5-10 days to 24 hours.
The project runs on R3 Corda blockchain network. As of now the project is in Beta stage and we can expect a global rollout once the testing stage is successfully finalised.
Happy Reading…
Today sees the Singapore launch of the trade finance blockchain Contour, formerly known as Voltron, and founded by seven global banks.
The letter of credit blockchain has initiated numerous pilots in 14 countries and recently had a global trial involving 50 banks and corporates.
Letters of credit (LoC) are relatively cumbersome and paper-intensive instruments. Typically an exporter won’t ship until the buyer’s bank provides an LoC guaranteeing payment. But to receive the payment, the seller has to complete a significant amount of documentation.
In pilots to date, by digitizing the process, Contour has reduced the time taken from 5-10 days to as little as 24 hours.
The group ran a survey, and 86% said traditional LoCs were too reliant on paperwork, and the process is becoming ‘intolerable’ for both corporates and banks.
HSBC’s Global Head of Trade Products and Propositions, Vinay Mendonca, commented: “Clients have clearly seen the value of blockchain technology to digitize Letters of Credit.
Besides reducing friction, it helps accelerate the velocity of trade, while allowing them to control their own data.”
The backers of the project are Bangkok Bank, BNP Paribas, CTBC, HSBC, ING Bank, Standard Chartered, SEB, consultants Bain & Company and technology partner CryptoBLK as well as R3.
Like many blockchain projects, the launch is relatively ‘soft’. So no banks are live or in production yet, and the network is in a beta stage. However, the company has been incorporated in Singapore, which is a feat in itself. The contracts for these sorts of ventures sometimes exceed more than a hundred pages.
About the Contour Platform –
The project is based on R3’s Corda distributed ledger technology (DLT).
“The opportunity cost in trade finance is huge. Trillions of dollars in commodities, products and services are transacted daily, but the sector is still characterized by slow, duplicative and expensive processes,” said Wegner.
“With the launch, Contour is now available to provide a full commercial service to organizations looking to enhance their trade finance practices. We are now focusing on scaling the network with more banks, corporates and partners, and look forward to continuing to collaborate with our growing community.”
