On June 16, 2021, the Blockchain trade finance network provider, Contour launched its first domestic network in Bangladesh to facilitate considerable access to trade finance to SMEs in the form of digital letters of credit (LCs).
Contour is owned by eight shareholder banks consisting of Bangkok Bank, BNP Paribas, Citi, CTBC, HSBC, ING, SEB, and Standard Chartered to provide a worldwide network for trade finance over distributed ledger that enables parties to execute transactions and retrieve information electronically.
The main offerings of the network provider, Contour, revolves around Letters of Credits for which the platform has efficiently managed to cut back the processing time by as much as 90% during testing, from a normal of 10 days to under 24 hours end-to-end. Since October, the members of the trade finance network providers have been attempting to scale up the network, with Vinay Mendonca, global head of product, propositions, and structuring, trade, and receivables finance at HSBC explaining that HSBC is urging its financial institution customers, especially in enormous documentary credit-issuing markets such as India, Vietnam and Bangladesh to join the network and backflows.
With this domestic network, Contour is handling adoption from the earliest stage. With the help of this purpose-built network, Contour is capable of offering digital LCs to SMEs in Bangladesh for domestic as well as international transactions.
As per Carl Wegner, CEO of Contour, “This is still essential for Contour's organization. The main difference is that this is a domestic offering for firms and banks to enable them to conduct local transactions cost-effectively, making our platform easily accessible to businesses of all sizes in Bangladesh. Earlier, we have essentially concentrated on cross-border trade. But this network will help local firms to benefit from the Contour’s worldwide as they can expand their global presence. For local banks, it is a great chance to test the framework locally first but has access to the emerging global network now of 13 banks in 25 nations. ”
Bangladeshi businessmen and banks have already shown their eagerness in adopting this blockchain technology for LC transactions, and Contour has made huge advancements in the market.
Last year in August, Standard Chartered executed the first blockchain of the nation for LC transactions over Contour, followed by its first interbank blockchain LC, between Bangladesh’s Prime Bank and HSBC. Meanwhile, Dhaka-headquartered City Bank also introduced the first-ever overseas Islamic blockchain LC, in association with the International Islamic Trade Finance Corporation (ITFC).
Carl Wegner added that “Bangladesh is among the top LC markets globally, with LCs being one of the most used trade finance instruments for domestic transactions in the nation. Contour focuses on becoming the primary digital trade finance network in Bangladesh. ”
Contour explains that now it is looking forward to onboarding over 50 corporates backed up by Bangladeshi and international banks in the upcoming six months, and adds that it is planning to “further speed up banks and corporates with custom prepositions for individual nations in the future.”
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