Contour, one of the world's largest blockchain trade finance networks, has announced that it is acquiring the rulebook and other associated legal documents from the we.trade Innovation DAC joint-venture company owned by 12 European banks.

Blockchain fintech we.trade, which marketed a bank payment undertaking (BPU) product as an alternative to a letter of credit (L/C), shut down in May after failing to secure enough capital to continue operations (DC World News, 15 June 2022).

Digital proposition

Through its acquisition of we.trade's legal assets, Contour says it will be able to accelerate plans to bring to market an improved digital open account proposition, alongside its traditional trade offering of digital L/Cs.

Contour says the new proposition will be compliant with the International Chamber of Commerce (ICC) Uniform Rules for Digital Trade Transactions (URDTT) that are designed to be compatible with United Nations Commission on International Trade Law (UNCITRAL) model laws, including those on electronic commerce, electronic signatures and electronic transferable records.

Blockchain consolidation

The acquisition marks the start of consolidation in the blockchain trade finance industry Contour claims.

Before it shut down, we.trade spent several years of developing and commercialising its new digitally-native BPU finance tool for trade, which was primarily targeted at traders unable to obtain L/Cs, bank guarantees, invoice financing and credit insurance

Contour believes the acquisition will drastically reduce the barriers to adding a new open account product to its growing network of banks and corporates and ensure that progress in trade finance innovation can continue.

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