Businesses in Thailand can now use a blockchain-based electronic letter of guarantee (eLG) platform and network by IBM and the Thailand Blockchain Community Initiative (BCI) following the expansion of scope as per an update on Sep 30.
The Electronic Letter of Guarantee Platform
The electronic letter of guarantee (eLG) platform was first announced in June 2019 when 22 Thai banks with support from the Bank of Thailand (BOT) joined the BCI initiative.
Services extended involve equipping the network with a hybrid cloud and multi-vendor capabilities, disaster recovery, and high availability across different regions.
Overly, these enhancements aim to reduce fraud, costs, and issuance wait times.
Commenting, Silawat Santivisat, Chairman of The Board, BCI (Thailand) Co., Ltd, said:
“The blockchain platform is significant to BCI as it is aligned to our roadmap of using a hybrid deployment model to grow to overseas markets in the future. The Letter of Guarantee is just the first service offering from BCI. The platform also sets a strong foundation for BCI to scale and expand our services offerings on top of bringing speed and efficiency to more companies.”
Efficiency and Fraud Minimization
In the business world, a letter of guarantee (LG) is both an insurance and a contract. Issued by a bank, the LG ensures the supplier gets paid for the services provided or goods delivered if the receiving company can’t pay.
The deployment of this contract via the blockchain will resolve a major pain point in financial transactions. At the same time, it shall enhance the level of security and trust helping the financial sector flourish.
It will specifically ease the issuance of LG where LGs are manually issued, reducing costs, and slashing negotiation wait-time that can take up to nine days.
Since launch, the blockchain platform claims to have issued LGs worth over $300,000, eliminate paperwork—minimizing the risk of forgery, while reducing wait time from nine to less than a day.
In June, As reports of the BOT extending CBDC testing to large corporations. It has already collaborated with SCG—one of the oldest banks in the country, to create a prototype CBDC payment system for businesses.