HSBC, Oman Oil and Orpic Group complete blockchain-based trade finance transaction in Oman
Mon, 25 Nov 2019, 04:28 am UTC
Oman Oil and Orpic Group have successfully executed a trade finance transaction using blockchain technology.
The transaction, conducted in collaboration with HSBC Bank Oman SAOG, involved the shipment of polypropylene, a thermoplastic polymer, to Abu Dhabi National Carpet Factory, an Abu Dhabi National Industrial Projects Group Company in the UAE.
According to a press release from Zawya, the transaction was executed using R3’s Corda system, which uses blockchain to track, and trace information as it moves between parties. HSBC Oman advised a fully digitized letter of credit (LC) on the blockchain with Oman Oil and Orpic Group as the beneficiary of the LC.
The blockchain-based LC process replicated the traditional process but with all participants using a single platform. Moreover, the transaction was completed in 24 hours compared to the usual 5 to 10 days.
By syncing all stakeholders, the Corda technology reduces the need for reconciliation and expedites transactions, whilst providing visibility on progress for all. This visibility, in turn, boosts confidence for all parties involved.
“During the last 71 years in Oman, HSBC has had many ‘firsts’ in the country including being the first bank to offer ATMs and the first online banking platform. Completing the first blockchain trade finance transaction is yet another significant milestone in our journey in Oman as it breaks new ground in pushing forward digital technologies in Oman’s financial sector. The support of the Central Bank of Oman was critical in taking the transaction from concept to execution in a short timeframe,” Andrew Long, Chief Executive Officer of HSBC Oman, said.
Just recently, HSBC also completed a blockchain-based international trade finance transaction between Saudi Arabia and Bahrain in collaboration with the Saudi British Bank (SABB).
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