Both Singapore and India saw the completion of their first letter of credit (LC) with blockchain for the first time at the start of this month.
BNP Paribas and HSBC Singapore completed the first Singapore LC transaction with a metal-enabled blockchain and mining company Rio Tinto and its multinational customer Cargill.
Rio Tinto sold an iron ore shipment from Australia to China for Cargill. The transaction involved BNP Paribas issuing an LC on the blockchain on behalf of Cargill to HSBC Singapore acting on behalf of Rio Tinto.
"What was previously a complex process is now accessible through a modern digital technology-based approach and a secure platform," said Lee Kirk, managing director of the engineering industry at Cargill. "At Cargill, we are transforming our supply chains with digital technologies like blockchain into commercial finance, commodity business operations and traceable food programs to better serve our customers worldwide."
In India, ING on behalf of Tricon Energy in the United States – the importer – issued an LC on the blockchain of HSBC India acting on behalf of the Indian conglomerate Reliance Industries.
"The use of the blockchain allows the exchange of export documents within a day, compared to the previous seven to ten days", said the joint CFO of Reliance Industries Srikanth Venkatachari.
R3 Rare blockchain platform enabled the two transactions.
Published for the first time on CFO Innovation