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.
Belinda Han, MUFG’s Managing Director and Head of Transaction Banking for Asia Pacific said the collaboration “is consistent with MUFG’s ongoing commitment towards integrating digitalisation into driving strategic growth and enhancing the client experience.”
MUFG’s expansive blockchain presence
Meanwhile, MUFG is involved in many of the major blockchain initiatives in Japan. It is the sole founder of Progmat, the platform for tokenizing securities, which is evolving into a consortium. Progmat will also support stablecoins issued by numerous banks. Additionally MUFG is involved in Japan’s metaverse interoperability consortium JMEZ, and in the trade sector it is a shareholder in TradeWaltz, Japan’s blockchain trade platform.