Standard Chartered, ADB & Contour Network Conclude first cross-bank Letter of Credit Blockchain Transaction

• Standard Chartered, on September 11, announced the completion of the first cross-bank Letter of Credit (LC) transaction between Vietnam and Thailand conducted over blockchain.
• This will be the first time that ADB is involved in a first credit guarantee using distributed ledger technology.
• The distributed ledger technology not only reduces the risks, but also reduces time, efforts but also that the transaction happens in real time with multiple participants. 

Standard Chartered, on September 11, announced the completion of the first cross-bank Letter of Credit (LC) transaction between Vietnam and Thailand conducted over blockchain. Announcing the transaction through a media release, the financial institution stated that the transaction was completed in partnership with Asian Development Bank (ADB), Bank for Investment and Development of Vietnam and Standard Chartered Bank (Thai). The transaction, which involves shipment of plastics worth $50,000 from Thailand to Vietnam’s Opec Plastics Joint Stock Company in August and was supported by Contour Pte. Ltd., a blockchain-based open industry platform. 

This will be the first time that ADB is involved in a first credit guarantee using distributed ledger technology. ADB’s Head of Trade and Supply Chain Finance Steven Beck was of the view that Covid-19 pandemic has urged everyone to use innovative ways to do trade in an efficient and risk-free manner. The distributed ledger technology not only reduces the risks, but also reduces time, efforts but also that the transaction happens in real time with multiple participants. 

Standard Chartered’s Global Head of Documentary Trade, Sam Mathew on his part said he is delighted to have partnered for the new credit guarantee segment with ADB and Contour. Mathew hopes that the project will mark as a milestone in transforming the way trade is done in a risk-free manner with the use of blockchain technology. He further adds that there is an increasing need for the industry and private players too develop scalable solutions. 

Contour CEO Carl Wegner, meanwhile, hopes the partnership will especially support the development banks and will help them reach their goals of making global trade more accessible and in a digital manner. The 

In a report released by the International Chamber of Commerce (ICC) in July, today,  more and more banks are inclined to use digital mode to do trade. Despite the mixed reactions on the potential use of blockchain in trade finance, there have been indications that banks were integrating distributed ledger technology (DLT)- based solutions in their trade finance operations. 

In fact, in China, there are about 170 banks that are using blockchain-backed trade finance. 

Ritika Sharma

With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.