Vietnam Based HDBank Set To Utilise Blockchain For Letters Of Credit
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HDBank, a massive financial institution based in Vietnam has become the first of its kind in the country to issue letters of credit using blockchain technology.
According to a report that was released earlier this week on the 6th of January, the issuance document presentation and successful payment of L/C on the blockchain highlights a massive achievement for the institution's mission to become a “happy digital bank“.
Participants involved in this first transaction were a local fiber importer and a yarn manufacturer in Taiwan.
For those that don’t know, letters of credit are extremely important when it comes to international trading. This is because it can provide a guarantee from an institution worthy of credit. A good example of this is a bank. By utilising the power of blockchain for L/C, there are numerous advantages at hand. Providing a higher level of security and a permanent record of the transaction can also reduce the time that is needed to process such transactions to a matter of hours.
With the institution becoming the first bank in Vietnam to issue letters of credit through the blockchain, will other local banks follow suit? Only time will tell; however, the power of blockchain is very much proven at this point so it would be foolish not to take advantage of it in today’s world.