Standard Chartered Bank has revealed that it successfully piloted a letter of credit (LC) transaction using the Voltron platform. The test was conducted between subsidiaries of Thailand’s state-owned oil-and-gas firm PTT Group and involved oil shipments to neighboring Singapore.
Voltron, an open-industry blockchain platform, facilitated the project to improve processes related to LC issuances.
According to a report by Coindesk, the Standard Chartered Bank said in a statement that all processes were successfully carried out without any irregularities.
“Standard Chartered was able to digitise and simplify the end to end exchange of information between all parties in the transaction on the Voltron platform, including the issuance, advising and negotiation of LC and presentation of documents,” the bank stated.
Samuel Mathew, the bank’s Global Head of Documentary Trade Product Management, added that it has been working with Voltron to digitize LC transactions using blockchain.
“We are extremely optimistic and excited about the potential opportunities that Voltron brings to the industry with its demonstrated benefits in improved speed and reduced risks of settlement, as well as its flexibility in connecting banks, businesses and other third-party providers in its network,” said Mathew.
Using blockchain to carry out LC transactions allowed stakeholders to access data involving the project in real-time, promoting greater transparency overall.
Traditionally, oil companies use LCs for short-term trade financing through a paper-based system. Generally speaking, this system has a turnaround time of five days for the transaction to be completed.
By comparison, the Voltron platform was able to complete the transaction in 12 hours, a vast improvement with profound consequences for the oil and logistics industries.
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