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

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

To date, Contour has focused on Letters of Credit, a document-heavy procedure where trade finance relies on bills of lading proving that goods have been loaded for transport. In contrast, open account trade finance is based on invoices, which was the focus area of ​​we.trade.

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

We.trade’s rulebook offers several advantages for Contour. It complies with the new ICC trade finance standard URDTT (explained later). Rulebooks by definition involve significant legal legwork and a lot of negotiation with participating banks to settle on a shared set of rules. We.trade has already done the hard work, so Contour is sweeping in to buy it. Hence Contour’s statement that this acquisition will “drastically lower the barriers to adding a new open account product.”

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

We.trade is not unknown to Contour’s team. Contour’s product manager, Josh Kroeker, was previously at HSBC in the team involved in we.trade. That said, he has been on Contour since January 2020.

Marco Polo / Contour overlap

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

Last week Marco Polo lost an important early leader, Daniel Cotti. On Linkedin, Cotti announced plans to partner with other trade finance experts to offer Trade Consulting as a Service with a digitization practice. Industry publication GTR portrayed this as a negative sign for the Marco Polo, which it may be since production has been slow.

On the other hand, Cotti was also chairman of the 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 had a small stake. And given Bolero’s turnover of around $7 million, the sale price wouldn’t be huge. However, Cotti’s new venture sounds like it will have some crossover with Contour’s letter of credit business, as it will explore how to “radically transform the documentary retail business.”

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