Saudi Arabia executes blockchain trade finance transaction

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Saudi Arabia executes blockchain trade finance transaction
Saudi Arabia executes blockchain trade finance transaction

As data shared on the network are indisputable and transparent, the use of blockchain enabled platform also makes the transactions more secure, reducing the risk of fraud

Taajeer Group, Saudi Arabian exclusive agent for MG cars in the Kingdom has utilised the blockchain enabled Contour platform in its importing of cars from China. A successful blockchain enabled trade finance transaction on the Contour platform was executed by HSBC, Chinese SAIC Motor, and KSA Taajeer group.

This is a regional first for the automotive sector and a first in KSA.

Blockchain enabled platform – Contour is a digital trade finance network that is building a global standard for trade by bringing together the world’s banks, corporates and ecosystem partners, onto a common, digital, and trusted network.

To import a shipment of cars from SAIC in a process that is up to 10 times faster than using physical documents, the blockchain enabled platform enabled end-to-end digitisation of the credit documentation required for Taajeer.

Chaker Zeraiki, Head of Global Trade & Receivables Finance for HSBC UAE, said, “Our digitising 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.”

Trade finance powers much of global trade and, according to HSBC, distributed ledger technology (DLT) has the potential to reduce transaction times from between five and ten days to under 24 hours, therefore unlocking working capital and enabling more trade to be conducted between markets.

Carl Wegner, CEO of Contour, said, “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. We are excited about the potential of wider adoption in this sector, as having a digital trade solution is no longer an option, but the new standard for the industry.”

As data shared on the network are indisputable and transparent, the use of blockchain enabled platform also makes the transactions more secure, reducing the risk of fraud.

Tom Lee, Managing Director of MG Motor Middle East, owned by the SAIC Group, added, “It brings me great joy to continue to offer ‘best-in-class’ service through an integrated supply-chain programme that can make our operations even more seamless. I believe that our bright future is filled with opportunities and our customers can rest assured they will be met with consistent high-quality supply from us, anytime and anywhere in the Middle East region.”

David Leslie, General Manager of the Trade Finance Business at SABB, concluded, “Blockchain can significantly reduce friction and increase the pace of trade for companies trading with Saudi Arabian entities.”

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