The European Bank for Reconstruction and Development (EBRD), and Egypt’s QNB AlAhli bank have facilitating three test letters of credit on the digital trade finance network Contour utilizing Blockchain enabled CargoX platform. The trial took place with QNB ALAHLI bank one of Egypt’s largest commercial banks, acting as issuing bank and the Blockchain enabled CargoX Platform used for electronic presentation of documents.
Contour uses decentralized technology to streamline the process by digitizing letters of credit, which reduces the paperwork involved in trade transactions, significantly shortening the settlement time of trade documents.
This trial included a test of Contour’s integration with the CargoX Platform for Blockchain Document Transfer. A Slovenian company, CargoX was selected by the Egyptian customs authorities as the official digital courier service provider for the advanced cargo information declarations that are processed by NAFEZA, the Egyptian National Single Window for Foreign Trade, which was launched in April 2021.
The EBRD has designated digitization as one of three main priorities under its current five-year Strategic and Capital Framework. As part of this approach, the EBRD is partnering with digital solution providers and banks to support digitalization in trade finance in and beyond the economies where it operates.
In addition, the EBRD is working with the International Chamber of Commerce, through its Banking Commission, and the International Trade and Forfaiting Association to advance the adoption of legal frameworks to enable digital trade and trade finance.
Heike Harmgart, EBRD Managing Director, Southern and Eastern Mediterranean, said: “We are proud to be part of the digital transformation in Egypt by facilitating these test transactions by QNB ALAHLI on Contour. New digital technologies will make trade and trade finance processes easier, faster and more effective, supporting the country’s goal to become a regional and international hub for transport and logistics.”
Mohamed Bedeir, QNB ALAHLI’s Chief Executive Officer, said: “Digital trade can play one of the most vital roles in the global economic recovery from the coronavirus pandemic. At QNB ALAHLI we believe in strategically addressing new and sustainable business models that embrace emerging technologies such as blockchain and artificial intelligence that are expected to enhance the trade landscape in the very near future, and significantly improve customers’ experience. It gives us great pleasure to cooperate with the EBRD, Contour and CargoX in this interesting project which meets our mutual objectives.”
QNB ALAHLI is part of the EBRD’s Trade Facilitation Programme (TFP), which was launched in 1999 to promote foreign trade to, from and among the economies in which the EBRD invests. Through the programme, the EBRD provides guarantees to international confirming banks and short-term loans to selected banks and factoring companies for on-lending to local exporters, importers and distributors. The TFP currently includes more than 100 partner banks in 30 economies where the EBRD invests and more than 800 confirming banks worldwide.
Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the EBRD has invested more than €8.7 billion in 145 projects in the country.