HSBC executes the first live blockchain Letter-of-Credit transaction in Korea and Vietnam | CryptoBLK
First-ever LC blockchain transaction in both Korea and Vietnam was successfully executed. CryptoBLK is the technical solution provider of Voltron.
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HSBC Executes the First Live Blockchain Letter-of-Credit Transaction in Korea and Vietnam

HSBC Executes the First Live Blockchain Letter-of-Credit Transaction in Korea and Vietnam

The blockchain-enabled Letter of Credit transaction facilitated trade between Duy Tan Plastics and Ineos Styrolution Korea

First ever pilot LC blockchain transaction in both Korea and Vietnam

Deal marks the next step in blockchain’s transformation of trade finance in Korea and Vietnam

 

HSBC has successfully executed a blockchain-enabled live trade Letter-of-Credit (LC) transaction between Duy Tan Plastics Corporation (Duy Tan) of Vietnam, and INEOS Styrolution Korea (INEOS Styrolution), both active players in the plastics industry.

This is the first pilot blockchain LC transaction in both Vietnam and Korea, and the seventh globally, led by HSBC.

The blockchain transaction involved a bulk shipment of raw plastic from INEOS Styrolution, the seller in Korea, to Duy Tan, the buyer in Vietnam. This was an end-to- end trade between buyer and seller completed on a single shared application, Voltron, rather than multiple systems, with HSBC Vietnam as the issuing bank and HSBC Korea as the advising/nominating bank.

The LC was issued and advised on 3 July. The transaction demonstrates that blockchain as a solution to trade digitisation, is commercially and operationally viable. Conventional exchanges for paper-based documentation related to letters of credit usually take between 5-10 days. This exchange was done in 24 hours.

Both Duy Tan and INEOS Styrolution saw increased operational efficiencies and greater transparency and security with regard to the transaction. The need for paper reconciliation was removed because all parties were linked on the platform and updates were instantaneous. The quick turnaround means unlocking liquidity for both businesses

Nguyen Bao Quoc, CFO of Duy Tan said, “We are very pleased to be part of the first trade transaction in Vietnam using blockchain technology conducted by HSBC. Entering the transaction was not only thrilling but momentous as we believe it can help us evolve all cross-border trade procedures, enabling a fast information exchange between sellers and buyers. As a business in this cross-border process, the benefits are huge for us”.

Dirk Arhelger, Head of Group Treasury & Investor Relations for the INEOS Styrolution Group said, “As the leading, global styrenics supplier, INEOS Styrolution is always looking for ways to improve our operations. Using blockchain to simplify our trade finance processes is a logical move. The transparency of this transaction on the Voltron platform has the potential to make what is normally a paper-intensive process, clear and simple. It will make the letter-of-credit fast and easy. The INEOS Styrolution team is excited to develop Voltron to be fully commercialized.”

Eunyoung Jung, President & CEO, HSBC Korea, stated, “I am very pleased that HSBC has led Korea’s first blockchain LC transaction using the Voltron platform. As the world’s fifth-largest exporting country, Korea can play a critical role in the digitalisation of trade and HSBC has capability to be a leading partner for it.”

Pham Hong Hai, CEO, HSBC Vietnam, said, “This groundbreaking transaction has demonstrated our strong commitment and ability to support cross-border trade using cutting-edge technology platforms.”

Mr Pham added that, “Vietnam as a country stands to benefit from the rapid movement in supply chains. Faster documentation turnaround time will open doors for businesses to further leverage Vietnam as a trade hub in Asia.”

HSBC has been pioneering the use of blockchain in trade finance starting with its groundbreaking LC transaction using the Voltron platform last May. This latest transaction is a reflection on how the technology is gaining traction in markets across Asia. HSBC continues to identify markets and partners to expand the use of this technology with the ultimate goal of commercialising Voltron.

The Voltron consortium is keen to work with more banks and companies in Korea and Vietnam interested in using this technology to give their businesses an edge over competitors.

 

CryptoBLK is the technical solution provider of Voltron taking care of the CorDapp development, Voltron network deployment and the technical operation.

 

About INEOS Styrolution

INEOS Styrolution is the leading, global styrenics supplier with a focus on styrene monomer, polystyrene, ABS Standard and styrenic specialties. With world-class production facilities and more than 85 years of experience, INEOS Styrolution helps its customers succeed by offering the best possible solution, designed to give them a competitive edge in their markets. The company provides styrenic applications for many everyday products across a broad range of industries, including Automotive, Electronics, Household, Construction, Healthcare, Packaging and Toys/ Sports/ Leisure. In 2018, sales were at 5.4 billion euros. INEOS Styrolution employs approximately 3,500 people and operates 20 production sites in ten countries. For more information: http://www.ineos-styrolution.com

 

About Duy Tan Plastics

Duy Tan Plastics Corp. was founded in October 1987 as a small manufacturer of plastic. The company’s goal is to assist and satisfy the needs and desires of our customers, to bring to entrepreneurs the best manufacturing solutions as well as households consumers high quality products and services. With more than 32 years of experience in the plastic industry, Duy Tan is honoured with many awards and certificates from prestigious organisations, both local and international. For more information: http://www.duytan.com

 

About Voltron

Voltron is a blockchain-based open industry platform to create, exchange, approve, and issue Letters of Credit on Corda, R3’s blockchain platform. It is initiated by eight founding member banks, including Bangkok Bank, BNP Paribas, CTBC, HSBC, ING, Natwest, SEB and Standard Chartered, in partnership with Bain, CryptoBLK and R3. Voltron will improve the trade finance process by simplifying letters of credit, delivering shorter settlement times, instant discrepancy resolution and simplified sanctions screening. Voltron is inviting banks, technology partners, and corporates to join the network.