Bank guarantees are a mechanism to secure payment of a stated maximum sum of money to a named party (usually called the beneficiary) in the event of non-performance or default by a party in the underlying relationship. Payment will be made by ANZ on presentation of a written demand for payment by the beneficiary. Bank guarantees substitute cash deposits with counterparties, freeing up working capital and potentially securing better contract terms.
Bank guarantees have been issued manually and on paper for many decades but this is about to change with Lygon completely digitising this process with blockchain technology. The digitisation of guarantees will simplify the exchange of value and information, automate the underlying transactions through the use of smart contracts, create a transparent register of valid bank guarantees, provide a materially higher degree of security and reduce the risk of fraud for all parties involved. Learn more about Lygon in the video below.
For more information on how ANZ can help you grow your business internationally please visit the ANZ Be Trade Ready site.