The Bangladesh branch of the recognized international bank HSBC has implemented a new blockchain-based system to import goods from Singapore. In order to do so, the company used the Contour DLT platform to create a letter of credit (LC) using distributed LEDGER technology.
HSBC Works With Blockchain Technology
HSBC Bangladesh has used blockchain technology to import 20,000 tonnes of fuel to Bangladesh from Singapore. The company that sold the fuel was a subsidiary of United Mymensingh Power, called United Group’s Singapore.
According to the chief executive of HSBC Bangladesh Md Mahbub ur Rahman, the transaction was a way to show how the bank is committed to implementing and using new technologies to improve trade.
On the matter, Md Mahbub ur Rahman stated:
“I believe this will usher in a new era of routing international trade transactions as businesses and governments recognize transparency, security and swiftness in performing tasks using blockchain technology.”
It is worth mentioning that the implementation of blockchain technology to conduct this transaction reduced the times of the whole import process from almost 10 days to less than 24 hours. Furthermore, the blockchain platform was built on top of the R3’s Corda that has been used in the past by many other financial companies in the world.
At the same time, the managing director of United Group, Moinuddin Hasah Rashi explained that fuel oil LCs are time-sensitive and each second of the process is important. With this new implementation of blockchain technology, it may be possible to increase efficiency and reduce costs.
The Contour blockchain platform is currently being used by other financial institutions including ING, Citi, Bangkok Bank, Standard Chartered, SEB, BNP Paribas and CTBC. HSBC is also part of this blockchain network that has been developed since 2017.
Until now, there have been different testings of the Contour network and most of them have been performed during this year. The blockchain network can be used to execute cross border transactions as it was already done with Singapore and Bangladesh, and Vietnam and Thailand in the past.
Blockchain technology has been growing over the last years and many companies are already using it in order to have better solutions and services. Moreover, several companies and large financial institutions are already creating their own blockchain networks. This is helping them work in a more efficient way and remain at the forefront of innovation in the market.
