Oman based Oman Oil and Orpic group along with HSBC bank Oman have executed the “first” blockchain trade finance transaction in the country, they announced on Wednesday.
The deal entailed the shipment of polypropylene – a thermoplastic polymer used in various applications – to UAE-based Abu Dhabi National Carpet factory, a statement said.
A digitised letter of credit (LC) was advised by HSBC Oman on a blockchain-based platform deploying R3’s Corda system. Oman Oil and Orpic Group was the beneficiary of the LC.
R3’s Corda system uses blockchain to track, and trace information moving between stakeholders, which “keeps them in sync, decreases the need for reconciliation, offers visibility on the progress, and accelerates transactions”, the statement said.
The transaction aimed to show blockchain’s commercial and operational applicability as an alternative to traditional paper-based documentation exchanges. The blockchain LC flow has all the stakeholders on a single platform, allowing the transaction to be completed in 24 hours compared to the current five to 10 days, the statement added.
“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,” said Andrew Long, chief executive officer, HSBC Oman.
Nazar Al Lawati, chief financial officer, Oman Oil and Orpic group, added: “We are proud to be among the first in the region taking serious steps in digitising trade finance through exploring blockchain technology.”