The first blockchain-based trade finance deal in the global steel industry has been struck – and it involves a UAE-based business.
The transaction was done by UAE’s Universal Tubes & Plastic Industries Ltd. and the Indian metals giant Tata Steel. It involved Universal Tubes importing its order of flat carbon steel to the UAE from Tata Steel’s India base. The transaction, with HSBC Bank overseeing it, confirms the “operational viability of blockchain as an alternative to conventional exchanges of paper-based documentation”.
It was done over the ‘Contour’ blockchain platform in which HSBC is a founding shareholder. “We are confident this will pave the way for widespread adoption by other clients, counterparties and industries, many of whom we are already in talks with,” said Sunil Veetil, Regional Head of Global Trade & Receivables Finance (GTRF) at HSBC.
The platform allows all parties to have visibility of a trade with no single organisation having control of all the data.