National Bank of Canada Trials Blockchain for Standby Letters of Credit

Canada-based global IT consulting and outsourcing firm CGI said that it had partnered with National Bank of Canada – the country’s sixth largest commercial bank – and blockchain firm Skuchain to trial distributed ledger technology (DLT) in a project revolving around negotiation standby letters of credit and guarantees.

The standby letter of credit is as a guarantee of payment issued by a bank on behalf of a client. It acts as a loan of last resort in which the bank has to meet the payment obligations in the case when their client cannot do it.

These kinds of agreements are traditionally carried out through emails, which makes them vulnerable to errors and delays. By leveraging blockchain, the parties can benefit from a high degree of transparency and reduced human error.

This article appeared first on Cryptovest

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