Today HSBC Singapore said it had executed a letter of credit using distributed ledger technology. The trade finance transaction was for a shipment of soya beans from Argentina to Malaysia for food & agriculture conglomerate Cargill. HSBC issued a letter of credit to ING using R3’s Corda technology.
Letters of credit make up roughly 40 percent of trade finance products. But the proportion of has been declining as fintech companies offer competing products which are quicker.
The bank explained that conventional exchanges for paper-based documentation usually take 5-10 days, whereas in this case, the exchange was in 24 hours.
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