Multinational investment bank Citi today announced its investment and participation in the new blockchain-based finance network Contour, joining a who’s who of other banking giants.
Contour launched last month after reporting successful trials in 14 countries “to digitise and modernise the $18 trillion trade finance market.” The network, headquartered in Singapore, is composed of over 50 banks and corporations, such as HSBC, ING, Bangkok Bank, BNP Paribas, and R3.
“Seeing greater collaboration from leading financial institutions shows how important revolutionising the trade finance network is,” Contour CEO Carl Wegner said in a statement. “To have a major global trade player such as Citi join us is a huge validation of the work we are doing and allows us to continue creating greater efficiency for the industry,” he said.
Citi Ventures, the division of Citigroup providing the investment, is likewise enthused by the deal and the potential that it brings. “The Contour team has a trusted background and is partnering with a strong consortium to help digitize Letters of Credit,” said Managing Director of Citi Ventures, Luis Valdich.
The Contour network is primarily focused on digitizing the Letters of Credit (LoCs) process using blockchain—the idea is to try to curb the inefficiencies of paper transactions between trade partners across borders.
“The opportunity cost in trade finance is huge. Trillions of dollars in commodities, products and services are transacted daily, but the sector is still characterised by slow, duplicative and expensive processes,” Wegner said when Contour launched last month. The network claims it “reduced processing times for LoCs by over 90%, from 5-10 days to under 24 hours,” during trials.
Contour says its network is built on R3’s “Corda” blockchain, which counts on major corporations like Mastercard, IBM, and Accenture as backers.