Main Vietnamese financial institution HDBank has now change into the primary financial institution within the nation to situation letters of credit score, or L/C, utilizing blockchain expertise.
In line with 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 acknowledged purpose, to change into a “Comfortable digital financial institution”.
The members 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 vital paperwork in worldwide commerce, offering a assure from a creditworthy establishment, corresponding to a financial institution, {that a} purchaser’s cost to a vendor will likely be obtained on time and for the correct quantity. In essence, the financial institution underwrites the cost.
Utilizing blockchain expertise for L/C has many benefits, corresponding to providing the next stage of safety and a everlasting document 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 obtained a business launch in Q2 2020, following a profitable trial in 2019.