Standard Chartered Completes Blockchain Trial with Thailand’s Oil Giant Using Voltronby Fintech News Singapore August 8, 2019
The use of blockchain for trade finance is often one of the most cited potential use case for technology, with some sources claiming that using blockchain to remove the bottlenecks could potentially increase global trade volumes by US$1.1 trillion by 2026.
Standard Chartered Bank is among the players with the financial services space that recognises the potential of using blockchain for trade finance.
The bank announced that they have successfully executed a pilot transaction with Thailand’s national energy corporation, PTT Group paving the way in transforming documentary trade with the first cross-border Letter of Credit (LC) issued over the Voltron blockchain platform in the oil industry.
Due to the significant cargo value, oil companies are often reliant on Letters of Credit as a form of short-term trade finance. However, this process is paperwork-intensive and requires up to five days for the delivery of these documents.
This pilot involved the shipment of an oil product from Thailand to Singapore. 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.
As the documents were sent electronically, all trade participants can view real time updates on the progress of the transaction. This resulted in a significant reduction of processing time to less than 12 hours, in addition to achieving greater transparency and cost efficiencies across the supply chain.
Mr Wittawat Svasti-Xuto, Chief Technology and Engineering Officer, PTT, revealed that, as the national energy corporation, they have perceived the opportunity to utilise innovative digital technology to not only support and strengthen its petroleum and petrochemical business operations, but also to enable the business to be adaptive for changes and create opportunities for trades and business operations among PTT Group.
Samuel Mathew, Global Head, Documentary Trade Product Management at Standard Chartered Bank, said,
“As our clients increasingly look to technology to address the challenges of today’s global trade environment, 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.”
Plakorn Wanglee, President and CEO of Standard Chartered Bank, said
“Standard Chartered Bank (Thai) Pcl’s priorities are to optimise our international network and introduce digitisation to enable our clients’ operational efficiency. It is an honour for us to have completed the very first real shipment transaction between Thailand and Singapore on the Voltron Platform. “
Standard Chartered is one of the founder members of Voltron, a blockchain-based open industry platform to digitally create, exchange, approve and issue Letters of Credits.