HSBC and ING have executed their first commercial letter of credit (L/C) transaction based on blockchain or distributed ledger technology.

The deal involved grain and agricultural commodity trader Cargill and was completed using the R3 Corda platform.

Soybean shipment

The blockchain L/C was opened for a cargo of soybeans exported from Argentina to Malaysia.

Cargill, the largest privately held corporation in the US in terms of revenue, was both the exporter and importer in the deal.

It involved Cargill Geneva selling soybeans on behalf of Cargill Argentina, and Cargill Singapore buying them on behalf of Cargill Malaysia.

Reduced timescale

The deal was transacted over Corda's L/C module, which reduced the transaction time from the usual 10 days to just 24 hours.

HSBC issued the L/C while ING was the advising bank in the transaction, which used conventional paper-based documents in other elements of the transaction, including the bill of lading.

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