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The Vietnamese financial institution will reportedly initiate the provision of letters of credit (L/C) on the blockchain, aiming at better and safer transactions for its clients.
Becoming a “Happy Digital Bank”
Vietnamese bank HDBank has announced it will issue letters of credit (L/C) using blockchain technology. According to a recent report, the major financial institution will pioneer the local digital market by becoming the first in the county to offer the L/C using blockchain technology.
A letter of credit resembles a bank letter, which guarantees that a buyer’s payment to a seller will arrive at a pre-determined time and amount.
HDBank has fulfilled the issuance, document presentation, and successful payment of letters of credit on the blockchain platform, thus marking “a new milestone” in its aim at becoming a “happy digital bank.” The institution will provide its clients with outstanding L/C transaction methods and blockchain technology on a trial basis.
The project’s core participants are leading fiber importer Century Synthetic Fiber Corporation and Tainan Spinning Co. Ltd, a major Taiwanese yarn manufacturer, and exporter. The team will also include CTBC, the L/C advising bank in Taiwan.
According to the report, blockchain-based L/C transactions provide users with higher security compared to traditional methods. They manage to reduce the transaction processing time, minimize both paperwork and risk of eventual errors, etc.
Based on the blockchain technology and HDBank’s collaboration with large banks and institutions worldwide, the letter of credit can provide a guarantee to the receivers. It creates trouble-free transactions plus an instant flow of precise and safe data.
Banks Aiming At Further Blockchain Adoption
Even though still scarcely adopted by traditional banks, blockchain and cryptocurrency have managed to attract the attention of many institutional-level companies across the globe. As CryptoPotato reported, another multinational financial institution has shown a leap of faith in adopting cryptocurrencies and blockchain. Singaporean DBS Bank has demonstrated its trust in the nascent technology. After it went through a doubtful period, followed by a soft-launch, now its own crypto exchange DBS Digital Exchange is a fact.
Already initiated, the project focuses on its institutional clientele. The platform strives to leverage blockchain technology to provide an ecosystem for fundraising “via asset tokenization plus secondary trading of digital assets, including cryptocurrencies.”
The new endeavor will offer three primary services:
– Security Token Offerings (STOs), which will allow the issuance and trading of digital tokens backed by financial assets.
– A spot cryptocurrency exchange with four fiat currencies (SGD, USD, HKD, and JPY) and selected cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Bitcoin Cash (BCH).
– Digital Custody Services – “an institutional-grade digital custody solution to meet the increasing demand for secure custodial services tailored for digital assets under their prevailing regulatory standards.” The platform will leverage DBS’ experience for this particular service.
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