Standard Chartered Bank has successfully executed a pilot transaction for Thai state-owned oil company PTT Group, PTT International Trading and petrochemical firm IRPC, 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 cargo value, oil companies are often reliant on LCs 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.