Today Contour announced that HSBC has gone live on the Contour blockchain that provides digitized letters of credit (LCs). With LCs being the more paper-intensive form of trade finance, COVID-19 has made the digitization process ever more pressing.
In trials to date, HSBC has seen major efficiency games cutting LC processing times from seven to ten days to as little as 24 hours.
“HSBC became the first bank to put a commercially viable letter-of-credit on a blockchain platform back in 2018,” said Vinay Mendonca, Global Head of Products and Propositions at HSBC. “And it’s fitting that we are the first bank to use this solution commercially.”
It’s probably fair to say that without HSBC there might be no Contour. Formerly called Voltron, the consortium lost some momentum in 2018, and HSBC continued development with Hong Kong’s CryptoBLK. Having pushed the project forward, the consortium was re-energized and earlier this year, it was incorporated in Singapore with seven founding members, including Standard Chartered, BNP Paribas and ING. Since then, it has attracted several new members such as Citi, Vietnam’s HD Bank, DBS Bank, SMBC, Alfa Bank and Standard Bank.
“A key focus for our network is to emphasise the interoperability and accessibility that Contour provides. Contour was developed to be used by the entire industry – from a small, yet international, corporate in a developing market to the world’s largest traders and banks,” said Carl Wegner, CEO at Contour. “We hope to deliver a solution that is scalable, accessible and meets the demands of international trade today.”
Today Contour promoted the concept of interoperability, saying that HSBC and its partners will decide which other technologies to integrate into the platform, whether its back office systems or digitizing documents such as bills of lading. There are several bills of lading blockchain solutions on offer, including from WavesBL, from the ports association IPCSA, the Interwork Alliance is working on a standard, and R3 recently acquired a bill of lading solution.
