The hire for the product tanker Ardent Coral was due at the end of the banking week, after most correspondent banks in Europe had closed their payment windows. Under the charter, a late payment gives the owner the right to withdraw the ship. So at 23:40 Dubai time, the charterer's treasury sent $1.14m in a dollar-backed stablecoin to the owner's wallet on Ethereum. The transfer settled in just over four minutes.
Both parties agreed to let us follow the transaction. It was, as far as the brokers involved know, the first time-charter hire on a tanker of that size to be paid this way from start to finish.
Why a stablecoin
The owner, Kestrel Tankers of Piraeus, and the charterer, the trading house Meridian Aurum, had a practical problem. Hire is paid fifteen days in advance under most time charters, and a missed deadline can cost the charterer the ship. Dollar payments between Dubai and Athens pass through at least one correspondent bank in New York and can take two working days, longer if a compliance officer asks a question.
"Twice this year we sent hire on time and it arrived late," says Farid Nazari, treasurer at Meridian Aurum. "Each time we had an owner's lawyer on the phone. We wanted a payment that arrives when we send it."
The clause they agreed allows payment in a named stablecoin to a named wallet, with the payment counted as made when the transaction is confirmed on the chain.
What it cost
The network fee for the transfer, paid in ether, came to $6.40. A wire transfer of the same size between the two banks would have cost around $45 in fees, plus an exchange margin if either side had converted. The real costs sat either side of the transfer.
Meridian Aurum bought the stablecoin from a regulated exchange, paying a spread of about 0.05%. Kestrel redeemed it for dollars the following week through its own account at the same exchange, at a similar spread. Together, the two conversions came to roughly $1,100: more than the wire fee, less than the cost of a late-payment dispute.
The compliance file
Both companies screened each other's wallet addresses through a blockchain analytics provider before the charter was signed, and each wallet is held by a custodian that verified the company's identity. The payment carried a reference matching the hire statement, and both treasuries archived the transaction hash with the invoice.
Elena Markou, Kestrel's finance director, says the paperwork was heavier than for a wire. "Our auditors wanted to see the custody agreement, the screening reports and the redemption statement," she says. "Once they had those, they were more comfortable than with some bank payments, because they could check every step themselves."
How the banks reacted
Less warmly. When Kestrel redeemed the stablecoin and moved the dollars to its main bank, the transfer was held for three days while the bank's financial-crime team asked for the charter party, the hire statement and the exchange's account records. The money was released without further questions.
"They were polite and slow," Markou says. "I understand why. They have no process for this yet."
Will it catch on
Brokers in London and Singapore describe interest as real but narrow. Traders with operations in several time zones like the speed. Owners worry about custody and about explaining the arrangement to lenders, whose loan agreements usually require hire to be paid into a specific bank account.
A ship-finance lawyer in Piraeus, Christos Vlachos, says Kestrel's lender approved the arrangement only after the wallet was added to the account security package. "The bank wants to know it can take control of the income if the loan goes bad," he says. "With a wire, that is one letter. With a wallet, it took us three weeks."
The next hire payment on the Ardent Coral went on-chain as well. The one after that went by wire, because it fell mid-week.
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