Previously named Voltron Blockchain, now known as Contour, the firm gains the undisclosed sum from one of the biggest bidders of the world. R3‘s Asia Chief Carl Wegner became the startup’s CEO and will lead the company to the successful launch of its innovative letter-of-credit (LoC) service.
The company reduced the time needed for the LoCs from 2 weeks to 24 hours max, in several test projects. Lisa Robins is serving as Head of Transaction Banking at SC. She says that thanks to the Corda blockchain, the deals are done faster due to the paperwork cut off.
Previously, Voltron was testing its services on yuan-denominated transactions and cross-border oil shipments. The blockchain-based LoC algorithm offers fast settlement to that kind of deal. In May 2019, almost all of the R3’s 50 banks were saying that Voltron is significant progress in financial systems.
Per Carl Wegner’s blog post:
“Trillions of dollars in commodities, products, and services are transacted daily, but the sector is still characterized by slow, duplicative and expensive processes. Contour delivers a network where trusted information is shared in real-time, effectively digitizing letters of credit across all users in the transaction… Contour is now focusing on scaling the network with more banks, corporates, and partners, and I look forward to continuing to collaborate with our growing community.”
What Is Contour and LoC?
Letters of credit are a payment guarantee from the bank. It is a kind of proof that one company will give back the money it took from the other one. Cross-border commerce highly relies on the letters of credit. The standard LoC’s are eating up to ten days to reach the settlement finality. Contour has gathered funds from Bain and Co., Bangkok Bank, BNP Paribas, HSBC, ING Bank, CryptoBLK and a hefty of other ventures to foster that time period.
Per Carl Wegner:
“The 400-year-old process for agreeing, issuing and tracking LoCs is largely manual, inefficient and costly. Each party must keep and verify its separate paper records, creating duplication and discrepancies. Contour digitizes LoCs on the blockchain, helping banks and corporates save time and money by reducing old fashioned, duplicative processes.”
In the second half of 2020, Contour will launch commercial implementation of its service. During this time, they’ll devote themselves to building a skillful team of developers and system analysts. When the blockchain revolution fully hit the banking sector, Contour guys want to be ”ahead of the curve”, as Christine Lagarde would say.
Jeff Fawkes is a seasoned investment professional and a crypto analyst covering the blockchain space. He has a dual degree in Business Administration and Creative Writing and is passionate when it comes to how technology impacts our society.