Tata Steel, along with HSBC, has executed a paperless, blockchain-enabled trade transaction. According to the company, it is a global first for the steel industry.
The live financial transaction involved the export of steel by Tata Steel to Universal Tube & Plastic Industries, UAE, a press release said on Wednesday.
The end-to-end paperless transaction, implemented over the Contour platform, was made possible through a unique collaboration coordinated by Tata Steel across the spectrum over the Contour and essDOCS platforms. The letter of credit was issued by HSBC UAE for Universal Tube & Plastic Industries, UAE (importer), with HSBC India as the advisory and transaction bank for Tata Steel, India (exporter).
This transaction validates the commercial and operational viability of blockchain as an alternative to conventional exchanges for paper-based documentation.
Tata Steel has also indicated its intention to explore similar opportunities in other geographies as well.
“We continually leverage our internal potential and the potential of the external ecosystems through carefully curated partnerships to drive innovation. Adopting this platform is in line with our objective of agility and always enabling a faceless yet reliable interface to enhance the customer experience. This unique initiative, implemented in collaboration with HSBC, demonstrates our continued efforts to lead technology-led disruption by challenging the status quo, ”said Peeyush Gupta, vice president (steel marketing and sales), Tata Steel .
With digitized trade documents, corporations can reduce the costs associated with handling paper documents, harmonizing them and streamlining the processing flow.
Using blockchain technology in trade finance enables comprehensive visibility for all parties involved and improved security. It helps to significantly reduce cycles of document and banking transactions from weeks to a few days. It also accelerates the pace of trade, especially in situations where transit routes are relatively short.