The first blockchain-based trade finance transaction has been completed in Oman for the country’s oil & gas industry. R3’s Corda platform was used for the transaction, with HSBC Bank issuing the digitized letter of credit.
The transaction was between Oman Oil and Orpic Group and Abu Dhabi National Carpet Factory for the sale of polypropylene. Using Corda, the blockchain-based transaction took only 24 hours to complete, instead of the usual 5 – 10 days.
The blockchain-based trade finance transaction is a crucial part of Oman Oil and Orpic Group’s plan to digitize its operations. Sadiq al Lawati, finance and strategy commercial value partner at Oman Oil and Orpic Group, says:
“This Blockchain pilot is an important station in our journey towards digitisation, a journey that started with Artificial Intelligence (RPA++) and continues to embrace new disruptive technologies.”
In the transaction, Oman Oil and Orpic Group was the beneficiary of the letter of credit issued on the blockchain platform by HSBC Oman. Corda provided visibility on progress for all stakeholders, helping to boost their confidence in the transaction.
Oman Oil and Orpic Group is one of the first businesses in Oman to use blockchain for the digitization of trade finance.
Blockchain technology has been increasingly implemented by financial institutions in many countries for better internal processes. In the U.K., London-based digital securities exchange Archax has announced that the company will use Corda to work with its post-trade activities.
BankDhofar, Oman’s second-largest bank by market value, started to use global ledger RippleNet for cross-border payments to India in February this year. With this technology, cross-border transfers via a mobile banking app are completed “in less than 2 minutes.”
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