On September 10, 2020, the completion of the first cross-bank Letter of Credit (LC) transaction between Vietnam and Thailand conducted over blockchain on Contour network made Opec Plastics JSC (Opec Plastics) become The first Vietnamese enterprise which successfully applied blockchain technology in LC issuing operation to foreign partners.
The transaction was conducted as an order for Opec Plastics to import virgin resins of Thailand’s SCG Plastics Co., Ltd, the notifying bank and confirming bank of the LC is Standard Chartered (SCB) Thailand in cooperation with SCB Vietnam. , the underwriter bank is the Asian Development Bank (ADB), the issuing bank is the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV). Unlike traditional trade finance transactions that need to be conducted on different systems, the entire process of this transaction is completed on the Contour network with the participation of exporters, importers and related banks.
This is the first trade finance transaction using blockchain technology in Vietnam to be performed via only Contour platform instead of banks’ internal system. Contour is a commercial finance network consisting of many banks, large corporations, focusing on developing transactions using R3’s distributed ledger technology (blockchain platform application), with the goal of providing one-stop channel and supporting the digitization of trade finance. This first transaction has also demonstrated the outstanding benefits of blockchain technology such as: transaction-processing speed is significantly improved (only 7 hours instead of up to 5 days as traditional method); improving liquidity for both importer and exporter; showing consistency and transparency so that all parties of the transaction could supervise transactions throughout the implementation process.
Mr. Nirukt Sapru – General Director of Vietnam, Group of 5 ASEAN and South Asia countries of Standard Chartered Bank – said: “We are honored to participate in this transaction, a significant milestone in the process of digitizing trade finance activities with documents. Trade finance transaction plays an important role in the Vietnamese economy and innovative solutions as Contour can optimize cross-border transactions, helping businesses to effectively grasp trade opportunities”.
With these positive effects, blockchain technology has been strongly deployed in many areas to promote global commerce. Therefore, with the core values “Intellectual – Integrity – Dedication – Internationality”, Opec Plastics is always ready to catch up with the trend, uphold the spirit of innovation and support transparency in transactions through the cooperation with financial institutions in the deployment and replication of blockchain technology application solutions in the coming time.