On July 15th, Etisalat Digital announced a new nationwide blockchain trade finance platform called UAE Trade Connect (UTC). It was developed in partnership with First Abu Dhabi Bank (FAB) and Avanza Innovations. So far, eight banks have signed up, but the platform is open to others.
As with most trade finance blockchain initiatives, the aim is to digitize trade in the UAE. The initial scope is to address double financing and invoice fraud.
Blockchains by their nature prevent an invoice being double financed, but only if the entire sector uses that blockchain. In India, Monetago partnered with SWIFT and other organizations to try to ensure invoices don’t get double financed within India. INVIOU has a similar solution, but we’re not aware of a significant deployment as yet.
However, for the UAE’s Trade Connect, invoice fraud is just the first step, and it’s forming a working group to extend the solution. The project won’t just leverage blockchain, but also artificial intelligence, machine learning and robotics.
The banks are First Abu Dhabi Bank, Emirates NBD, Commercial Bank of Dubai, Mashreq, National Bank of Fujairah, RAKBANK, Abu Dhabi Islamic Bank and Commercial Bank International.
Participant Mashreq Bank recently launched a blockchain solution for mortgage registration.
Last year, Noor Bank published a report on trade finance in the region. In the UAE, 7% of corporate trade finance applications are rejected, but that rises to 50% for SMEs. The MENA region has the second-highest trade finance rejection rate at 18%.
A month ago, HSBC processed a pilot Letter of Credit for UAE based Landmark Group on the Voltron trade finance blockchain.
Etisalat Digital is a division of telecoms carrier Etisalat one of the biggest in the MENA region. It’s a member of the Carrier Blockchain Study Group.