The International Islamic Trade Finance Corporation (ITFC) and Bangladeshi City Bank have completed a letter of credit deal on the Contour blockchain. The transaction was carried out in accordance with Sharia law.
The cross-border L / C transaction was facilitated by the ITFC unit specializing in trade finance under the Murabaha agreements. The letter of credit was issued on behalf of Debonair Group, a Bangladeshi apparel manufacturer, with Hong Kong-based trading company Apparel Link. The Contour blockchain was used to complete the transaction.
Bank Sheikh Mohammad Maroof, Head of Interbank and Microfinance at City Bank, said the bank is one of the leading digital financial institutions in Bangladesh. City Bank is ready to use the latest technologies to effectively interact with customers. It was the first Sharia-compliant blockchain transaction, marking an important milestone in City Bank’s history.
Maruf believes blockchain can significantly improve digital commerce. Contour CEO Carl Wegner noted that the digitalization of the trade finance industry is gradually accelerating. Blockchain opens up new opportunities for the efficient provision of letters of credit. Thus, a whole ecosystem of banks, corporations and technology providers is created, which is available to all stakeholders.
Recall that in November, the Bangladesh branch of HSBC for the first time carried out a transaction on the import of fuel oil with a letter of credit, which was also issued on the Contour blockchain. Previously, Standard Chartered also used this platform to process letters of credit in yuan.
