Today, Sumitomo Mitsui Financial Group (SMBC) declared that it’s joining two blockchain trade finance consortia, komgo, and Contour. Both networks recently concentrate on Letters of Credit. While open account trade finance obtained market share for many years, there was a turnaround in 2019 that witnessed a 6% growth in documentary trade finance revenues, including Letters of Credit (LC), according to a BCG/ICC report.

SMBC stated it was joining the networks to enhance efficiency in trade. It also emphasized staff working remotely as a consequence of COVID-19, which caused problems with the complicated exchange of documents needed for Letters of Credit. Because of these sorts of difficulties, COVID-19 has triggered a ramp up the digitization of trade.

The Japanese bank has already trialed the Marco Polo open account blockchain platform. Plus, it inked a deal with Japan’s SBI to examine taking 14% stake SBI R3 Japan, the joint venture to roll out R3’s enterprise blockchain technology in the nation. Swiss startup komgo, which concentrates on commodities trade finance, originally oil, has been in production for more than 18 months. It had 15 founding members, including various global banks, oil majors, and commodity traders. More lately, ConsenSys and Total funded, but SMBC is not a shareholder.

Letter of Credit network  Contour, previously known as Voltron, incorporated six months ago with seven bank shareholders. Since then, it has added Citi, Singapore’s DBS Bank, and Vietnam’s HDBank as members. The solution is recently in beta testing phase.

Marco Polo and Contour utilize R3’s technology, but komgo applies the Quorum flavor of Ethereum. These are essential wins for komgo and Contour. Notwithstanding the growing trend of digitization, we.trade blockchain network had to lay off staff to accommodate restricted funding options. The availability of trade finance insurance has contracted, occurring in various national export credit agencies stepping in to provide guarantees.