Wednesday, May 18, 2022

Vietnamese bank issues its first letters of credit on the blockchain

Main Vietnamese financial institution HDBank has now grow to be the primary financial institution within the nation to challenge letters of credit score, or L/C, utilizing blockchain expertise.

Based on a Jan. 6 report by native media outlet Việt Nam Information, the issuance, doc presentation and profitable cost of L/C on the blockchain marks a significant milestone on HDBank’s said purpose, to grow to be a “Glad digital financial institution”.

The individuals within the first transaction had been a neighborhood fiber importer and a Taiwanese yarn producer, together with the L/C advising financial institution in Taiwan.

Letters of credit score are essential paperwork in worldwide commerce, offering a assure from a creditworthy establishment, resembling a financial institution, {that a} purchaser’s cost to a vendor might be acquired on time and for the correct quantity. In essence, the financial institution underwrites the cost.

Utilizing blockchain expertise for L/C has many benefits, resembling providing the next stage of safety and a everlasting report of the transaction. It additionally reduces the time wanted to course of such transactions to a matter of hours.

HDBank joined the HSBC-backed Contour community for L/C again in Might 2020. As Cointelegraph reported, the R3 Corda-based platform received a commercial launch in Q2 2020, following a profitable trial in 2019.