Japan’s largest bank MUFG has joined the Contour blockchain network for digital letters of credit, the eighth systemically important member of the trade finance network and twentieth bank to join. The other massive banks are Bank of China, BNP Paribas, Citi, HSBC, ING, Standard Chartered and fellow Japanese bank SMBC which joined three years ago.
MUFG in Singapore is having a digitalization push in its Singapore office to reduce the reliance on paperwork. Last year banking network BAFT estimated that 30% of time in trade finance is spent paper pushing, costing $150 million a year. Using digital Letters of Credit (LCs), the processing time is reduced to less than 24 hours.
Contour already has decent global coverage, but with MUFG’s presence in 50 countires its reach could expand significantly, particularly in the Americas, where coverage is mainly from Citi and Standard Chartered.
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