SCB pioneers Bangladesh’s first-ever blockchain LC

Standard Chartered Bank acted as the issuing bank for the applicant, as well as the advising bank for the beneficiary of the LC. The entire transaction was paperless and completed digitally through Contour’s network

Standard Chartered Bank successfully executed the country’s first blockchain transaction by issuing a letter of credit (LC) for Viyellatex, an export oriented apparel manufacturer, using Contour’s blockchain network.

Viyellatex Ltd, one of the country’s leading readymade garment (RMG) exporters, imported textile items for Viyellatex Spinning, said a statement. 

Standard Chartered Bank acted as the issuing bank for the applicant, as well as the advising bank for the beneficiary of the LC. The entire transaction was paperless and completed digitally through Contour’s network, it added.

The RMG industry is Bangladesh’s main export sector, where most raw materials of this industry are sourced locally, through inland letters of credits.

In these inland LCs involve a lot of tedious paperwork but blockchain transactions can be moved into paperless as well as efficiencies can be achieved in local trade across this industry. 

“We are extremely proud to introduce Blockchain technology in Bangladesh for trade transactions. It has been a privilege to partner with Viyellatex Group to initiate the first Blockchain enabled Letter of Credit in the country,” said Naser Ezaz Bijoy, CEO of Standard Chartered Bank, Bangladesh.

“Standard Chartered Bank is very excited to offer our clients improved speed and reduced risks of settlement offered by platforms such as Contour,” said Naser.

“We recognize that our clients are increasingly looking for new solutions to address the need for greater efficiency, and that this milestone represents the first of many such transactions that will follow,” he added.  

“At Viyellatex Group, we always strive to provide quality products and services on time. We recognize that innovation and digitization is key to remain competitive in today’s ever-changing global trade scenario. Blockchain technology will certainly increase trading efficiency and reduce turnaround time of the LC process,” said KM Rezaul Hasanat, chairman and CEO of Viyellatex Group. 

“We are very happy and proud to collaborate with Standard Chartered Bank and become a part of the first trade transaction in Bangladesh using the revolutionary blockchain technology,” said Hasanat.  

Carl Wegner, CEO of Contour said: “Global trade lacks a solution that drives out inefficiencies, improves data transparency and enables interoperability between all trade participants. The long-established elements of trade finance don’t have sufficient integration, ultimately causing friction and unnecessary administration.” 

These inevitably cause significant barriers for global trade growth, adding complexity, increasing cost and delaying the process for both banks and corporate, he added.

The Contour network can overcome these issues, providing a consistent and reliable infrastructure for global trade to flourish especially in countries like Bangladesh that counts on LCs for a significant part of their trade volumes, said Wegner.

“The recent transaction with Viyellatex Ltd serves to prove that a solution is out there and readily available for adoption. It is also hugely positive to have Standard Chartered introducing this revolutionary technology for trade in Bangladesh and we are proud to be a part of the first transaction in the country,” he added.

Contour provides a distributed trade network enabling an enhanced degree of collaboration across the main elements of trade with all participants leveraging the network to create and renew trade data in real-time. 

Built on R3’s Corda blockchain, Contour improves data transparency, removes administration costs and reduces friction in global trade: all of this leading to an overall increase in efficiency and reduction in costs for all parties.