Through the Contour platform, HSBC conducted a blockchain-based trade finance transaction between SAIC Motor, a Chinese car manufacturer and Taajeer Group, the exclusive agent for MG cars in Saudi Arabia.
With the help of blockchain technology, it would significantly increase the speed of dealing with paperwork. HSBC noted that by using distributed ledger technology has the potential to revamp the trade finance sector by slashing transaction times to less than 24 hours from the present five to ten days.
Per the announcement:
“The Contour platform enabled end-to-end digitisation 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.”
Chaker Zeraiki, the head of global trade & receivables finance at HSBC UAE, stated:
“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.”
Contour seeks to digitize the worldwide trade finance industry worth $53 billion through decentralized technology by integrating digital networks across present fragmented ecosystems and trade routes as a blockchain trade finance network.
Carl Wegner, Contour’s CEO, pointed out:
“This transaction marks an important milestone in the Middle East’s automotive sector, proving that distributed ledger technology is successfully transforming the trade finance ecosystem.”
The blockchain-powered trade finance transaction is a first of its kind on Saudi Arabian soil, and it is seen as a stepping stone towards the nation’s Vision 2030 initiative of becoming a regional trade hub.
HSBC has emerged as a notable facilitator of blockchain-based trade transactions.
For instance, the leading British multinational investment bank and financial services holding company partnered with Wave to execute a blockchain-powered trade between China and New Zealand, Blockchain.News reported.
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Source: https://blockchain.news/news/hsbc-undertakes-blockchain-based-trade-finance-transacntion-for-automotive-sector-in-the-middle-east