A blockchain trade finance platform produced by eight major banks, among them BNP Paribas, HSBC, and Citi are now ready for commercial launch in Singapore in Q2 2020.

Called Contour, the launch accompanies a thriving trial of the platform, including approximately $30 million in LoC (letter-of-credit) transactions last year, South China Morning Post published on March 5.

Letter-of-credit transactions are a payment mechanism extensively used in international trade, in which a bank offers a seller with an economic guarantee for a buyer’s payment.

As the coronavirus proceeds to shake global markets, a regional executive said reporters that the platform could assure commercial trades move placidly even in times of emergency.

Ajay Sharma, HSBC’s regional head of global trade and receivables finance, declared that:

“Leveraging blockchain for trade finance has overcome the physical constraints we have today.”

He continued that the company running Contour demands to have a workforce of about 20 employees by the year’s end.

An established use case for blockchain

Bank-backed blockchain trade finance platforms are already prevailing in Asia-Pacific and globally. In 2018, a platform named eTrade Connect — financed by Standard Chartered, HSBC, BNP Paribas, and nine other banks launched in Hong Kong.

Trade finance platform we.trade, which also includes HSBC as a founder bank, alongside Santander, Rabobank, Société Générale, Deutsche Bank, UniCredit, and others — associated with the Hyperledger Fabric-powered IBM blockchain to complete its first live operations earlier that year.

In China, this springtime, a People’s Bank of China-affiliated initiative driven by the country’s foreign exchange reserve regulator led its own cross-border trade finance blockchain in three central trading provinces.

Blockchain technology is advantageous across the trade financing process — providing for the automated verification of customs documents and corresponding financing balances and providing transparent and real-time data sharing.

In Oman, major oil and gas enterprises and HSBC Bank Oman SAOG led their first entirely digitized letter of credit on the blockchain utilizing R3’s Corda platform last fall.