Financial services giant Standard Chartered has announced that it has successfully completed its first blockchain-based cross-border Letter of Credit (LC) transaction in the oil industry with PTT Group.
The pilot transaction, which was executed using the Voltron blockchain platform, involved the shipment of an oil product from Thailand to Singapore. PTT International Trading Pte Ltd and IRPC Public Company Limited were also involved in the transaction.
Oil companies often rely on LC for short-term trade finance. However, the existing process is largely paper-based and takes up to 5 days for the delivery of these documents.
Voltron, a blockchain-based open industry platform, aims to address these challenges by enabling digital creation, exchange, approval and issuance of LCs on Corda, R3’s blockchain platform. Standard Chartered is one of the founder members of Voltron, alongside Bangkok Bank, BNP Paribas, CTBC, HSBC, ING, Natwest, and SEB, with delivery partners Bain, CryptoBLK and R3.
In its press release, Standard Chartered said that it was able to digitize and simplify the end-to-end exchange of information between all parties in the transaction on the Voltron platform, including the issuance, advising and negotiation of LC and presentation of documents.
The participants were able to view real-time updates on the progress of the transaction, which helped reduce the processing time to less than 12 hours and led to greater transparency and cost efficiencies across the supply chain.
“This pilot transaction marks the first of many that will follow from our participation with Voltron to digitise trade and enhance the client journey,” said Samuel Mathew, Global Head, Documentary Trade Product Management at Standard Chartered Bank.
“[W]e are extremely optimistic and excited about the potential opportunities that Voltron brings to the industry with its demonstrated benefits in improved speed and reduced risks of settlement, as well as its flexibility in connecting banks, businesses and other third-party providers in its network.”
Just recently, Standard Chartered completed its first blockchain-based deep-tier supply chain financing transaction with China-based supply finance firm Linklogis. The financing was intended for upstream suppliers of Digital Guangdong.