SAIC Motor and Tajeer Group, the exclusive distributors of MG cars in Saudi Arabia, have turned to distributed ledger technology (DLT) to fund a deal. The deal sees financial giant HSBC as a party to the landmark transactions as it is a first for the entire automotive industry in the Middle East.
The transaction took place on the Contour platform, a network of global banks and corporate giants in a trusted digital network. The platform leverages DLT to offer “seamless integration with market-leading digital document systems” to improve data flow among “fragmented ecosystems”.
According to a joint press release by the parties, Contour was used to provide secure scanning of credit documentation needed by the Tajeer Group to purchase cars from SAIC Motors. The parties agree that this method shortens transaction times up to 10 times compared to the physical use of documents.
“This transaction marks a significant milestone in the Middle East automotive industry, proving that distributed ledger technology is successfully transforming the trade finance ecosystem,” said Carl Wegner, Chairman and CEO of Contour. “We are excited about the potential for wider adoption in this sector, as having a digital commerce solution is no longer an option but the new normal for the industry.”
The use of DLT in global finance has several advantages, including that of ensuring trust between participants by stifling the occurrence of fraud. The decentralized nature of the technology provides a wide range of funding options for gamers following the rise of decentralized finance (DeFi) protocols. The peer-to-peer lending options available have been touted to herald a wave of change in global corporate finance.
Tom Lee, Managing Director of MG Motors, hailed the move as one that brings him “great joy”, while David Leslie noted that using DLT “can significantly reduce friction and increase the pace for businesses. who are negotiating with Saudi entities”.
The whole Middle East is turning to digital assets
The Middle East has always approached digital assets with some skepticism. However, over the past 12 months, several countries in the region have reversed the trend of increasing adoption rates at a breakneck pace.
Of note is the United Arab Emirates and its commercial city of Dubai, which recently adopted the innovative framework to regulate the use of digital assets. The effect of the law was immediate as major 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 progress.
Watch: The presentation of the BSV Global Blockchain Convention, Marhaba: BSV in the Middle East
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