Oman Oil and Orpic Group and HSBC Bank Oman SAOG have conducted the country’s first blockchain-based trade finance transaction.
Oman Oil and Orpic Group and HSBC Bank Oman SAOG have conducted the first trade finance transaction on the blockchain in the country using R3’s Corda platform.
As news publication the Oman Observer reported on Nov. 23, Oman Oil and Orpic Group — one of the largest oil and gas businesses in Oman — and HSBC Bank executed the country’s first blockchain-based trade finance transaction: a sale of polypropylene to Abu Dhabi National Carpet Factory. The transaction was carried out using R3’s Corda, an open-source blockchain platform.
Fully digitized letter of credit
In the transaction, HSBC Oman advised a fully digitised letter of credit on the blockchain, while Oman Oil and Orpic Group was the beneficiary of the letter of credit. The application of blockchain technology allowed the parties to complete the transaction within 24 hours instead of the usual 5 to 10 days.
Nizar al Lawati, chief financial officer at Oman Oil and Orpic Group, said that the company is proud to be one of the first businesses in the country to promote the digitization of trade finance through blockchain. Sadiq al Lawati, finance and strategy commercial value partner at Oman Oil and Orpic Group, said:
“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.”
Finance sector adopting blockchain tech
Financial institutions around the world have been gradually adopting blockchain technology in a bid to improve their internal processes. Last month, Archax, a London-based digital securities exchange, revealed it will use Corda to manage post-trade activities.
In February, Oman’s second-largest bank by market value, BankDhofar, began using RippleNet technology for cross-border payments to India. The technology allowed the bank to provide cross-border transfers via a mobile banking application “in less than 2 minutes,” thus allowing non-resident Indians living in Oman to conduct real-time payment transfers.