HSBC has executed its first blockchain-based letter of credit (L/C) transaction in Korea and Vietnam.

Executed over the Voltron blockchain platform, the transaction saw a shipment from plastics company INEOS Styrolution in Korea delivered to Duy Tan, the Vietnamese buyer.

Fast document exchange

According to HSBC the transaction was completed in less than 24 hours compared with the several days it takes to process similar paper-based transactions.

The obvious benefits of speed and operational efficiencies were combined with greater transparency and security.

Enhanced security

Security is enhanced because documents are digitally signed. This reduces the risk of frauds relatively easily perpetrated in paper-based L/C transaction processing.

An additional benefit is that by speeding up the process, money is released faster.

Also, there is no need for reconciliation in the blockchain process because all parties receive simultaneous updates.

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