The World Economic Forum (WEF) recently published a white paper analyzing learnings from more than 60 governmental and nongovernmental entities across the United Arab Emirates (UAE) that are actively exploring or implementing blockchain.
By adopting blockchain technology, the UAE government expects to save $3 billion in transactions and documents processed routinely, 398 million printed documents annually, and 77 million work hours annually.
While the UAE’s regulatory environment is still lacking the West’s maturity and financial dexterity when it comes to digital wallets and crypto trades, blockchain is here to stay.
The International Data Corporation (IDC) projects that Middle East and Africa’s blockchain spending would surge from $21 million in 2019 to $105 million by 2023.
UAE banks are quickly and increasingly making room for it, but who are the major players and to what purpose are they using blockchain?
Abu Dhabi Commercial Bank (ADCB) has digitized trade finance for its customers using the Singapore-based dltledgers Blockchain platform.
ADCB is the first bank in UAE to run the end-to-end Blockchain trade finance transaction with full document automation through the dltledgers platform, as reported in Singapore.
The transaction moved goods for Western Red Spring Canadian Wheat worth $6.5 million from Canada to Bangladesh. ADCB’s private network provided end-to-end trade visibility across the entire life cycle of the transaction with authenticated and consented digitized documents at every step.
The flow mirrors the traditional letter of credit process, involving agreeing on the terms, the application, the issuance, the advising, the amendment request and its approval, the document presentation, the discrepancy resolution, and the bill settlement instructions. The efficiencies stem from using a single Blockchain network for all participants, instead of relying on multiple systems.
dltledgers customers have executed nearly $3 billion worth of live trade transactions via the platform, supported by 45+ banks and 4500 other ecosystem partners. Dubai customers include RAK Ceramics, ADCB, and Standard Chartered Bank.
On July 28, 2020, Dubai’s Department of Economic Development (DED) and Emirates NBD bank rolled out their UAE Know Your Customer (KYC) Blockchain Platform where over 120 SMEs have already signed up.
The new blockchain platform is designed to unlock digital customer onboarding, instant bank account functions through Emirates NBD’s E20 Digital Business Bank, and verified KYC data sharing between licensing authorities and financial institutions.
The platform will soon feature a number of banks including Commercial Bank of Dubai, ADCB, HSBC, and RAKBANK.
Also, Emirates NBD’s ‘Cheque Chain’ in 2017 has integrated blockchain into issued cheques to strengthen their authenticity and minimize potential fraud. Cheque Chain utilizes a unique quick response code that is printed on every leaf of newly issued checkbooks. The code registers each cheque on the bank’s platform. The bank witnessed a 99% reduction in cheque fraud and from January to November 2019, the project verified over 35 million cheques.
Abu Dhabi Islamic Bank
Abu Dhabi Islamic Bank (ADIB) reportedly became the first Islamic bank to execute trade finance distribution transactions using blockchain technology. ADIB conducted multiple cross-border transactions with partner banks using TradeAssets, a blockchain-based digital trade finance marketplace.
The Dubai Land Department (DLD), in partnership with UAE-based Mashreq Bank, has released a blockchain-based mortgage platform, which can serve as a repository for mortgage records. It is also designed to enable confirmation that mortgages comply with registration policies.
Dubai International Financial Centre (DIFC), Mashreq, and Norbloc, the leading KYC and client onboarding fintech regionally headquartered in DIFC, are jointly launching the region’s first production-ready blockchain KYC data-sharing consortium in the first quarter of 2020.
8 banks, 1 blockchain platform
First Abu Dhabi Bank (FAB), RAKBANK, Emirates NBD, Commercial Bank of Dubai, National Bank of Fujairah, Mashreq Bank, ADIB, and Commercial Bank International are collaborating with Etisalat Digital to develop a new blockchain-based trade finance solution, ‘UAE Trade Connect’ (UTC).
The platform will aim to help banks address the risks of double financing and fraud, validating trade transactions and checking whether they have already been financed through another bank.
Blockchain is the precursor to a fully digitized financial economy and the advent of cryptos and digital currencies as part of our daily lives. Today it’s a choice. Tomorrow could be by force.