BNP Paribas and HSBC Singapore have successfully completed Singapore’s first fully digitised end-to-end letter of credit transaction between two different companies – a move the pair said in a release today that will take the digitisation of trade finance a step closer to becoming a commercial reality.
The transaction involved Rio Tinto selling a bulk shipment of iron ore originating from Australia to China for its customer Cargill. As part of the transaction, BNP Paribas issued a letter of credit (LC) over the blockchain on behalf of Cargill to HSBC Singapore acting on behalf of Rio Tinto.
Both BNP Paribas and HSBC enabled a seamless end-to-end transfer of electronic bill of lading (eBL) over traded goods using a digital LC for the first time in Singapore, by integrating the Voltron trade finance solution through R3’s Corda blockchain platform in the back-end with Bolero’s eBL system.
Zoran Lozevski, head of global trade solutions, Asia Pacific, BNP Paribas, said: “The future of trade finance is digital and paperless, and BNP Paribas is pleased to be at the forefront of changes that will make facilitating trade even easier for our clients. Blockchain technology is an important pillar in our innovation agenda and we believe that transactions like this one will help achieve greater efficiency and transparency in trade finance for the benefit of all players in this space.”
Lee Kirk, managing director for Cargill’s metals business: “As the first fully-digitised iron ore transaction in Singapore, this marks a positive and exciting new development for the ferrous industry. What was previously a complex process is now accessible via a more modern, digitally-based approach and a secure platform. At Cargill, we are transforming our supply chains with digital technologies like blockchain in trade finance, commodity trade operations and traceable food programs to better serve our customers across the globe.”