DBS Bank, a multinational bank headquartered in Singapore, has become a member of the blockchain trade-finance network Contour, which is developed over R3’s Corda.
Contour is scheduled to be launched sometime this year. As per a May 11 document published by the business news outlet The Business Times, DBS Bank is the first banking institution based out of Singapore to become a member of the network.
Key institutions such as ING, Bangkok Bank, BNP Paribas, Standard Chartered, HSBC and Citi Ventures are behind the Contour network.
DBS hopes to digitize its letter of credit settlement process on an end-to-end basis using the blockchain powered platform. The bank intends to minimize settlement period, reduce the quantum of physical paperwork and ease the trading procedures.
Contour will also aid DBS’s corporate clients to carry out live pre-emission discussions between beneficiaries and applicants, leading to a precise issue of the letter of credit.
Real-time monitoring and audit trails of dealings will increase transparency and assist in mitigating or addressing errors in an effective manner.
Regarding the likely impact of Contour on the trade finance environment, John Laurens, group head of global transaction services at DBS Bank, said:
It’s about transforming the way industries work by providing greater transparency, security and speed to build sustainable trade ecosystems that are able to weather the peaks and troughs of economic cycles and are resilient in times of crisis.
Back in March, there were reports that Contour had carried out a triumphant piloting of its platform in 2019. During the trial, over $30 million worth letter-of-credit based dealings were carried out using the platform.
In the conventional trade funding system, many of the procedures necessitate human involvement and tons of paperwork. Considering the coronavirus outbreak, obviously, the need for a contactless trade document processing platform has become vital.
To resolve the problem, Ajay Sharma, HSBC’s regional head of global trade and receivables finance, has earlier asserted that “Leveraging blockchain for trade finance has overcome the physical constraints we are having today.”
