The Bangladesh branch of the global banking company HSBC for the first time conducted a transaction for the import of fuel oil with a letter of credit issued on the Contour blockchain.
HSBC has settled the import of 20,000 tonnes of fuel oil from United’s Singapore subsidiary Mymensingh Power. HSBC Bangladesh CEO Mahbub ur Rahman described the deal as a demonstration of the bank’s commitment to ” support cross-border trade using cutting-edge technology platforms.” He said:
“I believe this will usher in a new era of routing international trade transactions, as businesses and governments begin to recognize the benefits of transparency, security, and speed of completing tasks using blockchain.”
SWIFT estimates that in the first half of 2020, the volume of transactions using letters of credit in Bangladesh exceeded $34 billion. Thanks to the use of blockchain, the time required to process a transaction has been reduced from 5-10 days to less than 24 hours. United Group Managing Director Moinuddin Hasan Rashi said:
“Time is an important factor for letters of credit for goods such as fuel oil, when every second counts. We believe that the blockchain will help to effectively manage time costs, as well as provide increased efficiency and better cost management.”
Recall that last month, the Contour blockchain-based trade finance platform, developed by a group of eight banks, including HSBC, ING and Citi, was launched after beta testing ended. Earlier, a large Asian bank, Asian Development Bank, headquartered in the Philippines, conducted the first transaction with a letter of credit issued on the Contour blockchain.
In July, the Chinese metallurgical company Nanjing Iron&Steel Co made a $ 16.87 million purchase of iron ore via the Contour blockchain from Rio Tinto and Hancock Prospecting Pty, and in May, Standard Chartered held the first RMB letter of credit on the Contour blockchain.