Trade finance blockchain Contour acquires assets from we.trade – Ledger Insights

Today Contour, the blockchain trade finance network, announced that it has acquired we.trade’s settlement and related legal documents. We.trade, the trade finance network backed by a dozen banks, went bankrupt three months ago after banks decided not to provide additional funds.

To date, Contour has focused on letters of credit, a document-heavy procedure in which trade finance relies on bills of lading that prove goods have been loaded for transport. In contrast, open account trade finance is invoice-based, which was we.trade’s area of ​​focus.

Even before Contour was incorporated, the organization always stated that letters of credit were the first step and would expand into other trade finance offerings.

We.trade’s rulebook offers multiple benefits to Contour. It complies with the new ICC Trade Finance Standard URDTT (explained later). By definition, rulebooks involve extensive legal work and many negotiations with participating banks to agree on a shared set of rules. We.trade has already done the hard work, so Contour is rushing to buy it. Hence Contour’s statement that this acquisition will “significantly reduce the barriers to adding a new open account product.”

The URDTT or Uniform Rules for Digital Trade Transactions (URDTT) is a set of international standards first published by the International Chamber of Commerce last October. It is the product of the Digital Standards Initiative launched in March 2020.

We.trade is no stranger to the Contour team. Contour’s product manager, Josh Kroeker, was previously at HSBC on the team involved in we.trade. That said, he has been with Contour since January 2020.

Marco Polo / Overlapping contours

Meanwhile, the ICC’s digital standardization initiative was jointly launched by Marco Polo, another trade finance network that uses the R3 Corda enterprise blockchain. As Contour and Marco Polo begin to have more product overlap, they will be perceived as competitive.

Last week, Marco Polo lost one of the key early leaders, Daniel Cotti. On Linkedin, Cotti announced plans to work with other trade finance experts to offer Trade Consulting as a Service with a digitization practice. Trade publication GTR described this as a negative sign for Marco Polo, which may be the case as he has been slow to gain production traction.

On the other hand, Cotti was also president of electronic bill of lading (eBL) company Bolero, which was sold just three months ago. The sale was not a life-changing financial event for Cotti as he only held a small stake. And given that Bolero’s revenue was around $7 million, the sale price wouldn’t have been huge. However, Cotti’s new venture appears to have some crossover with Contour’s letters of credit business, as it will explore how to “radically transform the documentary trade industry”.

In today’s announcement, Contour positioned its acquisition of we.trade as marking “the beginning consolidation in the blockchain trade finance industry, with Contour leading the way.


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