Standard Chartered has become the latest bank to pilot the Voltron blockchain solution, this time for an oil transaction. The bank says it will now ramp up its contribution to the project to expand the application beyond letters of credit.
It is the first live, commercial pilot that Standard Chartered has conducted using Voltron, which is built by CryptoBLK on R3’s Corda framework.
Other founding members of the Voltron consortium have already completed a number of live pilots in different industries, including soybeans, plastic derivatives, metals and wool. In addition to Standard Chartered, the founding members are Bangkok Bank, BNP Paribas, CTBC Holding, HSBC, ING, NatWest and SEB.
The Standard Chartered pilot involved the shipment of an oil product from Thailand to Singapore, in which the exchange of information between all parties happened digitally through Voltron, including the issuance, advising and negotiation of the letter of credit (LC) and presentation of documents. Furthermore, all parties in the trade were able to view real-time updates on the progress of the transaction. The clients involved were oil and gas companies PTT Group, PTT International Trading and IRPC Public Company.
“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,” Standard Chartered says in a statement.
The bank adds that the Voltron pilot enabled “a significant reduction of processing time to less than 12 hours”, in addition to achieving greater transparency and cost efficiencies across the supply chain.
As previously reported by GTR, the Voltron consortium is currently looking to establish an independent legal entity by the end of the year that can bring Voltron into production. This is a similar approach to other blockchain consortia, such as we.trade and komgo, which are run by independent companies created by bank shareholders to own and operate the platforms.
The group is also looking to scale the technology to more players. Earlier this year, a six-week trial saw the participation of no less than 50 banks and corporate participants, who are now in the process of deciding if they wish to formally join project Voltron.
As for Standard Chartered, this pilot is “the first of many that will follow from our participation with Voltron”, says Samuel Mathew, the bank’s global head of documentary trade product management.
Also commenting on the transaction, Jordane Rollin, Standard Chartered’s global head of digital transformation, trade product management, hints that there are bigger plans for Voltron than the letter of credit.
“As the consortium prepares for full commercialisation of the network, we are continuously getting feedback from our clients via pilots to enhance Voltron with new features,” he says. “We have also started to ramp up on our contribution to this initiative to expand its offering beyond letters of credit and become a new industry standard for digitised traditional trade.”
Voltron is among a number of blockchain projects that Standard Chartered is involved in to make its trade business more efficient.
Earlier this week, the bank completed its first joint deep-tier supply chain financing transaction using Linklogis’ ‘WeQChain’ blockchain technology. The solution specifically targets businesses importing into, and exporting out of, China.
This follows Standard Chartered’s implementation of dltledgers’ blockchain-based platform, which is aimed at commodity traders, helping them to finance their supply chains.