The Saudi British Bank (SABB) and HSBC have for the first time used blockchain technology in Saudi Arabia and Bahrain to finance international trade. The move is expected to put Saudi Arabia and Bahrain at the forefront of global trade, introducing new levels of efficiency, security and transparency for corporates looking to access new markets.
The transaction involved the shipment of homogenized aluminum billets from Aluminium Bahrain B.S.C. (Alba) to Saudi Arabia’s Altaiseer Aluminium Corporation (TALCO). A letter of credit was issued by TALCO on a blockchain-based platform using R3’s Corda system.
Majed Najm, deputy managing director, corporate and institutional banking, SABB, said: “There’s been a lot of excitement about the commercial benefits of blockchain, so I’m proud we’re first to use it to improve how Saudi corporates trade internationally. Blockchain can improve many aspects of international trade, so it’s great to be in a position to pioneer these changes for the good of our customers and the economy.”
Melika Betley, CEO, HSBC Bahrain, said: “As the world’s leading bank for trade finance, HSBC is actively supporting the adoption of technologies such as blockchain to make global trade faster, safer and simpler. With intraregional trade continuing to grow, we see tremendous potential for blockchain in the GCC.”
Suliman S. Al-Oufi, general manager, TALCO, said: “We’re delighted to be the first to trial the use of blockchain in this way. We’ve always been innovative in terms of technology related to our product so it is a natural progression to explore innovation that helps us to trade more efficiently with our key overseas partners.”
We’re delighted banks like SABB are exploring new ways to take the hassle out of international trade for Saudi companies.”
Ali Al-Baqali, acting CEO, Alba, said: “Bahrain is on the go to establish itself as a hub for digital solutions specifically in fintech arena within the region. At Alba, we don’t see ourselves just as an aluminum supplier but we want to be also recognized for our progression in selling and trading more efficiently through digital platforms with our key partners such as TALCO.”