Yesterday, HSBC said it executed a pilot blockchain letter of credit (LC) transaction in Malaysia.
The LC was for the import of resin by Malaysia’s Simply Packaging from a Singapore company. HSBC Malaysia acted as the issuing bank, and HSBC Singapore was the advising bank.
One of the objectives of this pilot was to demonstrate the use of blockchain LCs for small and medium-sized companies. Historically, most LCs are used by large corporates. Simply Packaging is a mid-sized firm. Its joint Managing Director Shahid Chachia commented: “I believe this will be the mode of issuing LC moving forward as businesses and the governments recognize the safety and swiftness in performing tasks using the blockchain technology.”
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