SAIC Motor and Tajeer Group, the exclusive distributors of MG cars in Saudi Arabia, have turned to distributed ledger technology (DLT) to finance a deal. The deal sees financial giant HSBC as a party to the historical transactions as it is a first in the entire Middle East automobile industry.
The transaction took place on the Contour platform, a network pooling global banks and corporate giants into a trusted digital network. The platform leverages DLT to offer “seamless integration with market-leading digital document systems” to improve the data flow amongst “fragmented ecosystems.”
According to a joint press statement by the parties, Contour was used to provide secure digitization of the credit documentation needed for the Tajeer Group to buy cars from SAIC motors. The parties agree that this method hastened transaction times by up to 10 times compared to the physical use of documents.
“This transaction marks an important milestone in the Middle East’s automotive sector, proving that distributed ledger technology is successfully transforming the trade finance ecosystem,” said Carl Wegner, Chief Executive Officer of Contour. “We are excited about the potential for wider adoption in this sector, as having a digital trade solution is no longer an option but the new standard for the industry.”
The use of DLT in global finance has several benefits, including ensuring trust between the participants by stifling the occurrence of fraud. The technology’s decentralized nature offers a wide range of financing options for players following the rise in decentralized finance (DeFi) protocols. The peer-to-peer lending options available have been touted to herald a wave of changes to global business financing.
Tom Lee, Managing Director of MG Motors, hailed the move as one that gives him “great joy,” while David Leslie noted that the use of DLT “can significantly reduce friction and increase the pace for companies trading with Saudi Arabian entities.”
The entire Middle East is turning to digital assets
The Middle East has historically approached digital assets with a measure of skepticism. However, in the last 12 months, several countries in the region are bucking the trend to increase adoption rates at a frantic pace.
Worthy of note is the United Arab Emirates and its commercial city of Dubai, which recently passed the innovative framework to regulate the use of digital assets. The effect of the law was immediate as top digital asset service providers like Binance and FTX received full licenses to operate in the country, while Bahrain and Saudi Arabia are also making significant strides.
Watch: The BSV Global Blockchain Convention presentation, Marhaba: BSV in the Middle East
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