On 30 September 2020, IBM and Thailand’s Blockchain Community Initiative (BCI) announced their electronic letter of guarantee platform (eLG) is available to all businesses regardless of size. The consortium formed in March 2018, and six leading Thai banks are shareholders. They were joined last year by another 16 participant banks, including some that are foreign and 15 companies are now also involved.
More than 500,000 letters of guarantee are issued every year in Thailand, worth more than Baht 1.3 trillion ($43.2 billion). Since its launch in late 2019, the eLG platform has processed around $300 million in guarantees. A guarantee provides peace of mind to the seller to get paid, even if the buyer defaults.
The main purposes of the eLG platform are to prevent fraud, speed up the process of issuing letters of guarantee, and to reduce costs. Paper documents are forgeable, but by storing a guarantee on a blockchain, the recipient can verify that a bank issued it.
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