Standard Chartered Uses Blockchain To Complete Oil Firm’s Letter of Credit Deal
Standard-Chartered, which offers financial services with head-quarters in London, has finished its first cross-border blockchain letter of credit deal in the oil sector with Thai government owned oil giant PTT Group.
Standard Chartered stated that it has effectively completed a pilot letter of credit (LC) deal for PTT Group, IRPC Public Company Limited and PTT International Trading Pte Ltd on the Voltron blockchain platform.
Oil giants usually rely on LCs to meet their short-term funding requirements due to high value of cargo. Additionally, there are some downsides to this:
“This process is paperwork-intensive and requires up to five days for the delivery of these documents.”
The trial involved digitizing and streamlining the end-to-end data sharing between all partakers in oil shipment from Thailand to Singapore. The entire process of LC issuance, advice and negotiation and presentation of documents have been managed on the Voltron blockchain platform.
The parties who are part of the deal were able to receive real-time information on the status of the deal, resulting in a considerable speed-up of the overall process, which was completed in less than 12 hours.
Regarding the completion of LC deal using blockchain platform, managing director at PTT Supasachi Hongsinlark said as follows:
“The system will provide more visibility to monitor trade finance flow in real time, which will improve transparency and credibility for the trading process and thus strengthen the relationship between our partners and stakeholders in the long run.”
Crunchbase forecasts PTT’s annual revenue to be $60.50 billion. More importantly, Standard Chartered has finished its initial joint blockchain powered supply chain funding deal.