Tata Steel on Wednesday said it has received a ‘blockchain-enabled transaction’, a global first for the steel industry, from a UAE-based firm for a steel export order.
However, the steel maker did not disclose the size of the transaction.
‘Tata Steel and HSBC successfully executed a blockchain enabled transaction, a global first for the steel industry. This transaction was executed on Contour’s blockchain platform,’ a statement said.
The live trade finance transaction involved the export of steel by Tata Steel, India to Universal Tube & Plastic Industries, UAE, the statement added.
‘This unique initiative, executed in collaboration with HSBC, demonstrates our continued efforts to lead technology-led disruptions by challenging the status quo and reimagining the global trade set-up,’ said Peeyush Gupta, Vice President (Steel Marketing & Sales), Tata Steel.
Explaining the concept of a blockchain transaction, Tata Steel said this technology in trade finance enables comprehensive visibility for all involved parties and enhances security in payment. It helps reduce the document negotiation and banking transaction cycle from week(s) to a few days.
It also shortens the transaction time of Letter-of-Credit (LC) transactions by allowing electronic transfer of title documents and connecting all parties allowing instantaneous updates.
‘Having pioneered the deployment of blockchain technology in trade finance, we are focused on enhancing its utilisation across a wider spectrum of trade finance transactions.
‘This transaction is a significant step towards the mass commercialisation and adoption of this technology and we look forward to its transformative impact on trade finance,’ said Hitendra Dave, Head-Global Banking & Markets, HSBC India.
Tata Steel further said UAE is India’s third largest trade partner. While the physical transfer of goods between India and UAE takes a relatively short time, the administrative paperwork can delay their delivery.
Reduced transaction time will help boost the efficiency of trade in the India-UAE corridor that is characterised by many close-proximity shipping routes, it said.