HSBC has executed a blockchain-enabled, trade finance transaction between Chinese car manufacturer SAIC Motor and the Taajeer Group, Saudi Arabia’s exclusive agent for MG cars.
The transaction was conducted on the Contour platform and became the region’s first for the automotive sector. The Contour platform enabled end-to-end digitization of the credit documentation required for Taajeer to import a shipment of cars from SAIC in a process that is up to 10 times faster than using physical documents, a statement said.
Chaker Zeraiki, Head of global trade and receivables finance for HSBC UAE, said: “Our digitizing at scale means making customers’ lives easier and, with Contour, it means we’re cutting costs, reducing risk and speeding up trade. Bringing these benefits to the automotive sector and Saudi Arabia are a measure of our international connectivity and our global leadership in trade banking.”
According to HSBC, distributed ledger technology has the potential to reduce transaction times from between five and ten days to under 24 hours. This enables additional trade to be conducted between markets.
The use of Contour’s platform also makes the transactions more secure as data shared on the network is transparent. Contour uses decentralized technology to integrate digital networks for the immediate transfer of data across trade routes and current fragmented ecosystems globally. It seeks to digitize $53bn of global trade finance, the statement added.
The transaction is also a first in Saudi Arabia where, according to David Leslie, General Manager of the Trade Finance Business at SABB, increased digitization is aligned to the Vision 2030 initiative. “Blockchain can significantly reduce friction and increase the pace of trade for companies trading with Saudi Arabian entities”, he said.
In April last year, HSBC executed a blockchain-enabled, live trade finance transaction between UAE’s Universal Tubes & Plastic Industries and India’s Tata Steel.
The post HSBC Executes First Blockchain Transaction for Middle East’s Automotive Sector appeared first on UNLOCK Blockchain.