HSBC has China in its sights as they process a trade with a Yuan-denominated blockchain letter of credit


So first of all, what is a Letter of Credit?

A letter of credit is issued by a bank to another bank (especially one in a different country) to serve as a guarantee for payments made to a specified person under specified conditions.


Double First

HSBC has processed a Yuan-denominated letter of credit using the Voltron platform but why is this important? According to a report in Reuters, this is the first transaction of its type to use Yuan and the first to utilise the Voltron platform. The transaction saw Hong Kong-based MTC Electronic export a shipment of raw materials to its mainland-based parent company, Shenzhen MTC.


SWIFT, the global provider of secure financial messaging services conducted research into the market and found that China-related trade produced 1.2 million letters of credit worth $750 billion in 2018 alone.
Source: FinExtra


Shenzen MTC Headquarters in Longgang District of Shenzhen, China.


Voltron is an open co-operative initiative delivering a blockchain-based open industry platform to create, exchange, approve, and issue Letters of Credit on Corda.  Using Voltron, corporations are able to connect with their trade partners via a single, simplified channel, enabling the exchange documents and value across an open network. In addition, trade documents produced on external networks by a corporate’s supply chain partners can be digitally sent, verified and processed in Voltron.

Voltron aims to enable banks to provide faster service levels, financing decisions and lower rates to their customers. They help to lower barriers of adoption and create an open ecosystem – a unique partner programme is available to enable trade finance solution providers to offer a Letter of Credit solution on the Voltron business network.
Source: Voltron 


To learn more uses cases about how blockchain enables disruption across supply chain, billing and smart contracts, why not join Invenica and LAB577 for ‘Blockchain innovation & disruption in Media & Telecoms’ – 06.11.19 – 3pm



Read the full press release here.

Contact Joseph Lee for more information on trading across a blockchain.