International Islamic Trade Finance Corporation, a Jeddah based organisation, has partnered with the Bangladesh-based City Bank to execute the world’s first Shariah-compliant cross-border blockchain transaction, reports Finance Magnates.
The Letter of Credit transaction was financed by ITFC’s Murabaha Trade Finance line.
According to the official press release, the LC was issued on behalf of a Bangladeshi exporter Debonair group to import textile-related accessories from Apparel Link, a trading company based in Hong Kong.
Contour, a network build by R3’s Corda blockchain technology, executed the transaction.
‘City Bank is the leading digital bank in Bangladesh and is committed to using technology to provide an efficient and satisfying experience to our clients. This transaction will pave the way for improved digital trade through blockchain technology. I would like to thank all related parties who were part of this pioneering transaction’, said Sheikh Mohammad Maroof, head of wholesale banking, trade services, SME-small, and micro finance at City Bank.
In November 2020, Finance Magnates reported an announcement by the Australian and Singaporean trade authorities to simplify cross-border trade through the use of blockchain technology between the two countries.
‘We’re finally seeing the trade finance industry embrace digitisation and reap the benefits of improved connectivity and efficiency in LC presentation. As we continue building the world’s trusted network for global trade, we’re keen to ensure this growing ecosystem of banks, corporates, and technology providers remain inclusive and accessible for all,’ Carl Wegner, CEO of Contour mentioned in the official press release.
‘This being the first sharia compatible transaction completed on our network marks an important milestone toward our ongoing goal,’ he added.