Digital Assets: HSBC Bangladesh Transacts 20K Tonnes Of Fuel Oil On The Contour Platform
United Mymensingh Power Ltd imported the consignment from Singapore.
Bangladesh executed its first cross-border (Letter of Credit) LC transaction for the import of 20,000 tonnes of fuel oil from Singapore on the blockchain through HSBC. The transaction opens up the possibility of slashing standard LC processing times from 5-10 days to within a day. (The Daily Star)
Bangladesh’s United Mymensingh Power Limited imported the fuel oil from Singapore and the LC marked the first transaction between the two countries on the Contour platform.
The Contour platform is a decentralized trade finance network that uses distributed ledger technology using R3’s Corda blockchain platform.
The transaction illustrates the successful digitization of trade. Bangladeshi businesses can, therefore, look forward to simpler and faster business procedures and savings in working capital.
“This showcases our strong commitment and ability to support cross-border trade by Bangladeshi businesses using cutting-edge technology platforms,” said Md Mahbub ur Rahman, chief executive officer of HSBC Bangladesh. “I believe this will usher in a new era of routing international trade transactions as businesses and governments recognize transparency, security, and swiftness in performing tasks using blockchain technology.”
Iron ore transaction
In September, Rio Tinto and Guangxi Shenglong Metallurgical successfully conducted an iron ore LC transaction on the Contour network. DBS Bank acted as the Advising/Presenting Bank.
“The value proposition for blockchain is its ease of use and transparency of information on goods, transactions, and participants across the entire trade ecosystem,” Sriram Muthukrishnan, Group Head of Trade Product Management, DBS Bank, at the time. “Its immutable properties offer validation that there has been no corruption of the data, enhancing trust between counterparties and banks providing trade finance.”
Contour went into live production in October 2020, connecting banks, companies, and countries globally.
Paper-based processes are antiquated and inefficient. They are also unacceptable in a world grappling with social distancing and remote working in a post-lockdown world.
Therefore, the need is to reduce the level and volume of contact points by the digitization of processes. Besides, paper processes add complexity, cost, and delays, affecting both corporates and banks.
However, Contour delivers a streamlined digital application for trade finance over a distributed ledger network.
It allows parties to manage their own data while transacting. They can also view shared information seamlessly and securely with their trading partners and service providers.
Users across the world are now commencing the process of changing over to a live Contour environment to execute trade finance transactions, particularly LCs.
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