Contour, a trade finance network that uses blockchain to simplify the letter of credit (LC) process, is ramping up activity in Asia as demand for digital trade solutions in the region continues to grow.

This week, the blockchain consortium expanded its footprint in South Korea with the addition of Posco International, the country’s largest trading company, to its production network. The company will use Contour to digitise its end-to-end LC settlement process across its trade ecosystem of more than 80 subsidiaries around the world in sectors including energy, steel, agricultural resources and component materials.

Meanwhile, Contour shareholder Bangkok Bank has racked up another transaction on the network, in collaboration with Indonesian financial institution PermataBank. The deal involved the export of plastic resin from a Thai subsidiary of Asian petrochemicals giant SCG Chemicals to Indonesian chemical manufacturer Lautan Luas, and comes amid a flurry of activity in Thailand as it seeks to position itself as a key regional centre for digital trade and e-commerce.

Earlier this year, Thailand’s Electronic Transaction Development Agency partnered with the UK’s Centre for Digital Trade and Innovation (C4DTI) in a Foreign and Commonwealth Development Office-funded project to accelerate progress on digitisation. The country has recently implemented a number of initiatives, including the National Digital Trade Platform – a blockchain-based portal similar to Singapore’s Networked Trade Platform – and the establishment in January of a digital free trade hub in partnership with Chinese e-commerce giant Alibaba.

Speaking about the transaction on Contour, Kulachet Dharachandra, CFO at SCG Chemicals, says: “The technology makes it possible to track the transaction status of all parties immediately and transparently, streamlining the whole process of drafting LC applications, receiving LCs and digital billing. Not only does it significantly reduce time and the use of paper in the transactions, but it also helps Lautan Luas cut additional costs that may occur from container yard charges, for keeping containers at the port in case the goods arrive at the destination port before the bill of lading. This has increased Lautan Luas’ satisfaction, and the company aims to continue using LC through blockchain transactions.”

“The implementation of blockchain technology in trade transactions is PermataBank’s effort to help entrepreneurs and corporations save time and reduce the risk of fraud, as well as streamline the transaction process, so that businesses can grow faster,” adds Darwin Wibowo, director of wholesale banking at PermataBank, adding that his bank is the first in Indonesia to provide trade finance transactions on a blockchain platform.

For Carl Wegner, Contour CEO, these developments are testament to the transformative shift towards digitisation that is rapidly sweeping across Asia’s trade landscape. “We are seeing wider adoption of digital solutions in Asia as it facilitates faster and more secure trade flows,” he tells GTR. “Corporates in this region, especially SMEs in Southeast and South Asia, are recognising the need to embrace new technologies to drive value and remain resilient.”

“Regional banks are leading the advancement of digitisation in Asia, as they are the key enablers for SMEs to access trade finance,” he adds. “They have the local knowledge to conduct accurate risk assessment and the size of the balance sheet to support the volume of deals. By leveraging technology, regional banks now have the tools to scale, and through digital trade networks like Contour, they can connect to global banks on the other side of the transaction.”