Standard Chartered has completed its first cross-bank letter of credit (L/C) blockchain transaction between Vietnam and Thailand over the Contour network, the blockchain-based open industry platform focused on digitising trade finance.

The transaction was completed in partnership with the Asian Development Bank (ADB) and the Bank for Investment and Development of Vietnam.

The transaction involved a US$50,000 shipment of plastics from Thailand's SCG Plastics to Vietnam's Opec Plastics Joint Stock Company.

ADB first

By digitising the end to end exchange of information and streamlining the process of L/C issuance and confirmation, all trade participants achieved a significant reduction in processing time from up to five days to within seven hours according to a statement issued by Contour.

It said the transaction also marks the successful completion of ADB's first credit guarantee in a transaction executed using distributed ledger technology, as well as the first L/C comprising a sell-down feature to be conducted on Contour.

Future prospects

Contour says it hopes the transaction will pave the way for more banks and corporates to collaborate on innovative technology that can support the growth of trade, having demonstrated the ability to complete the trade sell-down process with greater speed and efficiency.

Head of trade and supply chain finance at ADB, Steven Beck, said the transaction demonstrated how digitised operations make trade more efficient, reduce risk and lower barriers to entry for small- and medium-sized businesses in developing Asia.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.