The transaction was accomplished with the help of a partnership with Asian Development Bank (ADB), Bank for Investment and Development of Vietnam and Thailand's Standard Chartered Bank, according to the report. It was completed over the blockchain-based Contour network, which is an open industry platform and focused on digitizing trade finance.
The trade involved a $50,000 shipment of plastics from Thailand's SCG Plastics to Vietnam's Opec Plastics Joint Stock Company, FinanceFeeds writes. The digital nature of the trade was preferable for parties involved because it used less paper and less time. Through the streamlining of the LC issuance and confirmation, the participants saw the time it took to complete the deal go from five days down to around seven hours.
In addition, the transaction marks the first time ADB has completed a credit guarantee via distributed ledger technology, and also the first LC with a sell-down feature conducted on Contour, FinanceFeeds reports.
Now, according to the report, more banks will be able to work together on innovative technology to help trade evolve through the greater speed and efficiency of the blockchain process.
Last year, Standard Chartered reported the completion of a trade finance transaction via blockchain between Australian agriculture commodities trader Agrocorp International and customer BSM Global, of Bangladesh. Representatives from Standard Chartered said the new speed and efficiency would make a difference for users.
Standard Chartered debuted a new Banking as a Service solution, nexus, in March, which worked to give digital platforms like eCommerce or ride-hailing operations the option to ability to offer credit cards, loans and savings operations in their own brands. The service was debuted in Indonesia initially, a country which boasts a tremendous 88 percent eCommerce adoption rate.