HSBC has executed the first blockchain transaction for the automotive sector in the Middle East. The transaction, enabled by the blockchain platform Contour, was between the Chinese carmaker SAIC Motor and Taajeer Group, the authorized dealer of MG cars.
HSBC-backed Blockchain Platform Accelerates Trade Finance Processes by 10x
The Middle East’s automotive sector has just registered its first blockchain transaction. The payment, facilitated by the British bank HSBC, was performed on the Contour platform, a decentralized network that connects banks and corporations, allowing paperless trade and trade finance.
The transaction was between China’s largest automaker SAIC Motor and Tajeer Group, the exclusive agent for MG cars in Saudi Arabia. This is the first blockchain transaction for the region’s automotive industry, but also for Saudi Arabia.
“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.”
– Chaker Zeraiki, Head of Global Trade & Receivables Finance for HSBC UAE
Thanks to Contour’s underlying technology, the digitization of the credit documentation for the transaction was 10 times faster than using physical documents, HSBC said in a statement. HSBC, a proponent of blockchain and central bank digital currencies (CBDCs), claims that distributed ledger technology (DLT) can reduce transaction times from 5-10 days to under 24 hours.
Moreover, the blockchain technology powering the Contour platform also makes the transaction more secure as data shared between the users is transparent and irrefutable. Thanks to faster transaction times and better security, the DLT will allow more trade and a higher number of transactions in the future, said HSBC.
What is the Contour Network?
Introduced in August 2022, the Contour is a decentralized network that links together banks and corporates for trade finance and paperless trades. The network was developed by a consortium of eight banks, including HSBC, and three delivery partners.
The primary goal of the platform is to create a single channel that allows the digitization of the trade finance process. Contour had a successful beta phase in 2020, in which over 20 global banks and 75 corporates participated.
HSBC’s first blockchain transaction in the Middle East comes less than a year after the bank teamed up with the Core-FX blockchain platform to facilitate bilateral foreign currency (FX) transactions. In 2019, the bank settled $250 billion worth of Forex trades using its “FX Everywhere” blockchain platform.
This article originally appeared on The Tokenist
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