HSBC Bangladesh Will Use Blockchain To Import Fuel From Singapore

HSBC Bangladesh completed the first blockchain-powered cross border trade platform in the country by using a letter of credit. The Bangladesh branch of the global banking firm conducted the first blockchain-based letter of Credit transaction on the Contour DLT platform as we are reading more in today’s blockchain news.

HSBC Bangladesh and its chief executive Md Mahbub ur Rahman described this transaction as showing the bank’s commitment to supporting cross-border trade using “cutting-edge” technology platforms. The transaction was used to settle a transaction of 20,000 tonnes of fuel oil from Singapore’s subsidiary United Mymensingh Power.

 “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.”

Global Payments service SWIFT estimated that Bangladesh trades using LCs were worth about $34 billion in the first half of 2020. By utilizing Blockchain technology, the time to finish the process of transacting was reduced from between five and 10 days to less than 24 hours. United Groups’ managing director Moinuddin Hasan Rashi said:

 “Fuel oil LCs are highly time-sensitive where every second counts and we believe this blockchain technology will help to manage time efficiently and also ensure increased efficiency and better cost management.”

Contour is a blockchain platform that is built using R3’s Corda which connects the financial institutions and corporate entities in a decentralized trade finance network. Contour is owned by eight financial institutions like HSBC, Citi, ING, Bangkok Ban, BNP Paribas SEB, CTBC, Standard Chartered, and more. The development started in 2017 and was then dubbed “Voltron” before launching the closed beta the following year. Eighty different entities spanned 17 countries tested the Contour leading up to the commercial beta launch at the start of 2020 with the platform exiting beta a month ago.

Contour has been used to settle the 176,000 iron ore trade between China and Malaysia with the Philippine-based Asian Development Bank that uses the platform to execute the first cross-border blockchain LC transaction between Thailand and Vietnam. As reported previously, The major cryptocurrency exchange Binance hired former HSBC banking and fintech veteran named Teana Baker-Taylor to lead its expansion in the United Kingdom and the European markets. Baker-Taylor was the executive director of the blockchain and digital assets industry body from the UK, Global Digital Finance. In 2018 and 2019, she was also recognized as one of the most influential women in the fintech scene.