A NEW SMART BL;OCKCHAIN
Aug 15, 2024
Intro of the news
Intro of the news
The successful execution of Bangladesh’s first blockchain-enabled trade with India represents a major step forward in integrating blockchain technology into cross-border trade. The use of blockchain for trade finance is gaining momentum as it simplifies traditionally complex and paperwork-heavy processes, enhancing the overall efficiency of international transactions. By utilizing a blockchain letter of credit (LC), the transaction was not only faster but also more secure and transparent, eliminating risks such as document fraud and miscommunication between trading parties. This breakthrough highlights the potential of blockchain to modernize global trade by offering real-time updates on transaction status and ensuring that every step in the trade process is accurately recorded on a decentralized ledger.
What is Trade Finance?
Enhanced Efficiency: The use of blockchain technology streamlined the transaction process, reducing the typical processing time from several days to under 24 hours.
Paperless Transactions: The entire process was conducted digitally, eliminating the need for physical documentation and minimizing the risk of errors associated with manual handling.
Secure and Transparent: Blockchain's immutable ledger ensured that all transaction data was securely recorded and easily accessible to authorized parties, enhancing transparency and trust between the trading entities.
Industry Collaboration: The successful execution of this blockchain-enabled trade was facilitated by collaboration among key industry players, including Tata Steel, Standard Chartered Bank, and the involved Bangladeshi steel company.
“ Blockchain's decentralized and immutable nature allows for real-time tracking and reduced risks of fraud, streamlining processes like document verification and cross-border payments. ”
Miranda H. Halim
The partnership between Tata Steel, Standard Chartered Bank, and the Bangladeshi steel company in executing the blockchain-enabled trade signals an important shift toward digitalization in the South Asian market. The paperless trade process greatly reduced the administrative burden and the risk of manual errors, promoting a smoother and more streamlined transaction flow. The ability to execute this trade in under 24 hours instead of the usual days demonstrates blockchain’s potential to accelerate trade processes, ultimately leading to cost savings and greater efficiency for businesses.
