Impact of Integrating Blockchain in Letter of Credit Process

Abstract

The Letter of Credit (LC) is a critical instrument in international trade, ensuring payment security and trust between exporters and importers. However, the traditional LC process is often criticized for being paper-intensive, time-consuming, and vulnerable to fraud and inefficiencies. The integration of blockchain technology offers a transformative solution by digitizing and decentralizing LC operations, thereby improving transparency, speed, and security. This article explores the impact of integrating blockchain technology into the LC process, highlighting its benefits, challenges, and implications for global trade, particularly from the perspective of emerging economies such as Bangladesh.