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Banking giant HSBC announced this week that it has successfully executed a blockchain-enabled live trade Letter-of-Credit (LC) transaction between South Korea and Vietnam.
In a press release dated July 22, the bank said that this was first blockchain LC transaction in both Korea and Vietnam, and the seventh globally, led by HSBC.
The transaction involved a bulk shipment of raw plastic materials from INEOS Styrolution, the seller in Korea, to Duy Tan Plastics, the buyer in Vietnam. The end-to-end trade between buyer and seller was completed using Voltron blockchain platform, with HSBC as both the issuing and advising/nominating bank. The LC was issued and advised on July 03.
HSBC said that the blockchain-based transaction demonstrated the technology’s commercial and operational viability. The time for exchanging LC documentation was reduced to 24 hours from between 5-10 days taken via conventional methods.
Both the buyer and the seller saw increased operational efficiencies and greater transparency and security. By linking all parties on the platform, the technology also removed the need for paper reconciliation and enabled instantaneous updates. This will lead to a quick turnaround, which would help unlock liquidity for both businesses.
“I am very pleased that HSBC has led Korea’s first blockchain LC transaction using the Voltron platform. As the world’s fifth-largest exporting country, Korea can play a critical role in the digitalisation of trade. HSBC as the world’s leading international bank is naturally leading the blockchain vanguard,” Eunyoung Jung, President & CEO, HSBC Korea, said.
HSBC is one of the founding members of Voltron, which was officially announced in October 2018. Voltron initially began as a project within the R3 blockchain consortium. Other founding members include Bangkok Bank, BNP Paribas, CTBC Holding, HSBC, ING, NatWest, SEB, Standard Chartered, Bain, CryptoBLK, and R3.
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