Singapore-based Contour has announced a transaction on its blockchain network between Rio Tinto and Guangxi Shenglong Metallurgical, thereby digitising the trade finance process.
China CITIC Bank processed import Letter of Credit (LC) on the Contour network to meet the needs of its client – Guangxi Shenglong Metallurgical. Guangxi Shenglong Metallurgical has joined Contour as a new buyer on the network. Rio Tinto, together with its advising/ presenting bank, DBS Bank, has also been executing a steady pipeline of transactions on the network since May 2020.
This latest trade of iron ore is said to have benefited from an enhanced degree of collaboration that Contour’s network offers. All parties have the autonomy to control and manage their data as they use the blockchain network. Counterparties access the information to advance the transaction to the next stage.
Carl Wegner, CEO, Contour said, “Our expansion continues to showcase the merits of a blockchain network for trade finance. Thanks to the continuous support of our members, and with China CITIC Bank piloting our network, we are changing the way trade finance is conducted. Our goal as a network is to create a unified solution to the barriers within trade finance…”
An LC forms a kind of financial bridge to facilitate a transaction, adding trusted banks and a trusted global process in between a buyer and seller with conflicting demands. Digitisation of trade is the answer here, and the LC has long been seen as the product set to benefit the most from this transformation.
Sriram Muthukrishnan, Group Head of Trade Product Management, DBS Bank said, “…The value proposition for blockchain is its ease of use and transparency of information on goods, transactions and participants across the entire trade ecosystem. Its immutable properties offer validation that there has been no corruption of the data, enhancing trust between counterparties and banks providing trade finance – which is increasingly critical in the challenging environments we operate in today.”
Copyright @2020 IBS Intelligence