Standard Chartered announced the successful completion of the first interbank letter of credit (LC) transaction between Vietnam and Thailand conducted via blockchain.
Is Blockchain Technology Reaching Its Potential?
It seems that it was only recently that Blockchain technology was tried and criticized for being used in crypto. Now, after much struggle, the world recognizes its potential.
According to the Finance Feeds report, Standard Chartered completed the first LC transaction between banks via the Blockchain, between Vietnam and Thailand. The transaction was completed through the Contour network.
This was achieved through a partnership with the Asian Development Bank (ADB), the Vietnam Investment and Development Bank and the Standard Chartered Bank of Thailand, according to the report.
For those of you who don’t know, an LC, or Letter of Credit, consists of a letter from a bank that guarantees that the buyer’s payment to the seller will be received on time and in the correct amount. In addition, it is a fundamental aspect in international trade.
Thus, the transaction involved $ 50,000 Thai dollars from SCG Plastics to the Opec Plastics Joint Stock Company of Vietnam. Therefore, as Finance Feeds explains, the digitization of this process implied a reduction.
Basically, the time was reduced from five days to approximately seven hours using Blockchain technology.
Without a doubt, it is precisely the ability to streamline processes and reduce friction that makes Blockchain technology have so much potential in various industries.
It stings and spreads
Obviously the news could mark a point of no return given that now more banks could implement Blockchain technology in their processes with the aim of increasing their efficiency.
This first step is very good news for technology, its development and adoption.
“The successful completion of this pilot marks another notable milestone in our journey towards transforming document trading with risk sharing woven into the blockchain platform. It also highlights the need for industry players to come together and develop innovative and scalable solutions »Said Sam Mathew of Standard Chartered
While Carl Wegner, CEO of Contour, noted that “With this new functionality to support development bank guarantees, we can further our goal of making global commerce accessible, digital and secure for all.”
Will we soon see a rapid implementation of Blockchain technology in banking processes? What will this mean for the industry?