Prime Bank PLC and Dhaka Bank PLC have successfully concluded the Proof of Concept (POC) for Green LC, marking a significant achievement in trade digitization. This initiative has resulted in the execution of Bangladesh’s first Inland Letter of Credit (LC) on a blockchain platform developed locally, signaling a transformative shift in digital trade operations.
The initiative aligns with the directive issued by Bangladesh Bank (FE Circular 06, dated 14 January 2025), which urges financial institutions to adopt electronic solutions for LC transactions. This directive covers various aspects, including transmission, advising, presentation, acceptance, and all subsequent processes, aiming to enhance efficiency and transparency in trade finance.
Collaboration for a Secure and Transparent Ecosystem
The Green LC initiative is the outcome of extensive collaboration among multiple leading banks that came together to form a consortium dedicated to driving this transformation. Their collective efforts have established a foundation for a more secure, transparent, and efficient digital trade ecosystem, reducing reliance on traditional paper-based processes.
Stakeholders involved in the initiative have acknowledged the role of partner banks in achieving this milestone, recognizing their dedication to innovation and commitment to reshaping trade operations. The successful execution of the POC demonstrates the potential of blockchain technology in streamlining LC transactions, ensuring secure and real-time processing.
Technological Integration and Future Prospects
The POC was conducted in collaboration with SSCL, the technology provider responsible for ensuring a seamless, secure, and efficient digital trade environment. The integration of blockchain technology has significantly enhanced the reliability and transparency of the process, mitigating risks associated with traditional trade documentation and improving operational efficiency.
With this development, Prime Bank PLC has reinforced its commitment to digital innovation in financial services. The successful implementation of the Green LC initiative sets a precedent for future advancements, paving the way for a trade ecosystem that is entirely digital, paperless, and streamlined.
As the financial sector continues to embrace blockchain-driven solutions, the success of the Green LC initiative is expected to influence broader adoption of decentralized technologies in trade finance. The transition towards fully digitized trade transactions is likely to enhance the overall efficiency, security, and accessibility of financial operations in Bangladesh, fostering a more robust and technologically advanced economic landscape.
