HSBC Bangladesh has completed the country's first blockchain cross-border trade settled using a letter of credit (L/C).

The deal was processed on the Contour digital ledger technology (DLT) platform.

Significant time saving

The transaction involved a shipment of 20,000 tonnes of fuel oil from United Group's Singapore subsidiary, United Mymensingh Power.

By utilising blockchain technology, the time taken to process the transaction was reduced from between five and 10 days to less than 24 hours.

New era

HSBC Bangaladesh's chief executive, Md Mahbub ur Rahman, said he believed the deal ushers in "a new era of routing international trade transactions as businesses and governments recognise transparency, security and swiftness in performing tasks using blockchain technology."

Global messaging platform SWIFT estimated that Bangladeshi trades using L/Cs were worth more than US$34 billion during the first half of 2020.

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