Blockchain letter of guarantee solutions
Speed the bank guarantee process by eliminating excessive paperwork and increasing visibility end to end
Malay man signing papers at a business meeting
Letter of guarantee: a process in need of change

A letter of guarantee is a  contract issued by a bank on behalf of one of their customers who has entered into a contract to buy goods or services from a supplier. The letter of guarantee lets the supplier know that they will receive payment, even if the bank customer defaults. To obtain a letter of guarantee, the customer will need to apply for it.

Blockchain technology can help to transform the letter of guarantee process by making it completely paperless, digitized, and transparent. This transparency helps eliminate fraud and forgery, since the blockchain network is secured by permissioned participants, including reputable financial institutions. This creates a highly secure network for document filing and retrieval, where each transaction is recorded in an immutable, auditable ledger — which is not owned by any central entity.

The advantages of a letter of guarantee solution built on IBM Blockchain Reduce cycle time and costs

From application to issuance, a standardized, blockchain-based network can compress this time from days or weeks, down to a single day. Having a “single source of truth” lowers the risk of disputes, reduces processing time, and improves reporting and tracking.

Enhance security and prevent fraud

Only authorized network participants can execute a letter of guarantee, which is encrypted, and an immutable record is stored on the blockchain. The record is auditable by all permissioned parties.

Increase productivity and visibility

Fully digitized workflows, with all key functions available online through a simple user interface, make it easy for applicants, beneficiaries and issuers to view, manage and report on their letters of guarantee.

Building trust in bank guarantees with the Lygon platform Three of Australia’s largest banks and a large real estate and shopping center owner have worked with IBM to create Lygon, a first-of-a-kind blockchain platform to digitize and transform the bank guarantee process for both financial and performance guarantees. Lygon enables applicants, issuers and beneficiaries to obtain and manage legally binding guarantees. Among other benefits, the platform reduces issuance time from one month down to one day. Blog: Lygon powers all-digital letters of guarantee with blockchain

BCI simplifies letter of guarantee management with blockchain Twenty-two banks and nine large organizations have joined the Thailand Blockchain Community Initiative (BCI), using a blockchain network to issue and manage electronic letters of guarantee to businesses of all sizes. BCI helps reduce process complexity, simplify data verification, lower fraud, and boost efficiency. Some member companies already report seeing a 200% reduction in transaction costs. IBM News Room: BCI advances pilot to include businesses of all sizes

Learn about enterprise-grade blockchain

The cloud-based IBM Blockchain Platform delivers the end-to-end capabilities you need to quickly develop, operate, govern and secure business networks.

Blockchain in financial services

Learn how blockchain can bring simplicity, transparency and efficiency to financial transactions across industries.

See blockchain use cases

Be inspired by how innovators are transforming their businesses through use cases built on the IBM Blockchain Platform.

Next steps
Learn how to get started

No matter where you are on your blockchain journey, IBM can help you take the right next step. Learn how you can get started with IBM Blockchain.

Get started with blockchain
Blockchain consulting and services

Leverage industry leading expertise and find a shorter path to innovation.  Benefit from joining established networks or build and scale your own along side experts.

Explore blockchain consulting and services
Connect with an expert

Contact a representative and get help with questions on how to start you blockchain journey.

Contact an IBM representative
Blockchain use cases

Be inspired by how innovators are transforming their businesses through use cases built on the IBM Blockchain Platform.

Explore blockchain use cases