DBS, Contour Conclude Secured Letter of Credit Transaction on Blockchain Network
DBS and blockchain trade-finance network Contour declared the completion of the network’s first digital end-to-end secured letter of credit (LC) as part of efforts to digitalize trade finance. The transaction was made between Nanjing Iron & Steel, Singapore Jinteng International, and Hope Downs Marketing Company – an equal joint venture in Rio Tinto and Hancock Prospecting stated DBS in a statement. This is the bank’s second transaction on Contour’s network since it became a member bank in May.
As the issuing and advising bank, DBS had combined the parties over the mining value chain. At the same time, Contour’s associate essDOCS allowed the management of the electronic bill of lading by its CargoDocs solution. The approval of key contract terms, LC issuance, and presentation of export documents under the LC were carried out electronically from commencement to conclusion on the Contour network.
“This not only resulted in reduced trade document turnaround times but also provided greater transparency with all parties having access to real-time status updates at each step of the transaction,” DBS said in a statement. By offering a “neutral and open network,” Contour can provide its solution to a broad range of financial institutions and corporates, enabling individual technology providers to combine within its network to streamline LC issuance further.
Carl Wegner, Contour chief executive, said in a statement, “With yet another transaction pair on our network, we are showing the full scope of what a blockchain solution can offer to trade finance. This is a hugely positive sign of a changing industry – organizations are taking advantage of our technological solution and using it to transform a previously paper-based process that is outdated and unfit for purpose in the modern world.”
Sriram Muthukrishnan, DBS group head of trade product management, said in a statement, “The silver lining arising from challenges faced in the current environment is rapid acceleration and acceptance across all industries and geographies of the need to digitalize to survive and thrive in the ‘new normal,’ and we expect to see more companies transitioning from analog-based trade finance processes to digital ones shortly.”
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