September 19, 2018 11:58 PM
Commodity traders, including Shell and Mercuria, are collaborating with a number of international banks to create a blockchain-based trade finance platform they hope will become the standard for the commodity trading industry.
Based in Geneva, komgo SA is an Ethereum-based ConsenSys development that has grown out of the Easy Trading Connect project, a partnership between Dutch bank ING, and France’s Société Générale and Mercuria energy company.
Described as a blockchain-based digital ledger system for tracking commodity transactions, such as oil trades, the new project and independent company is a larger collaboration of those three companies and an additional 12 founders, including Gunvor Group, and Royal Dutch Shell Plc on the commodities side. The partnering banks include ABN Amro Group NV, Cooperatieve Rabobank UA, Macquarie Group Ltd, Mitsubishi UFJ Financial Group Inc, Natixis SA, BNP Paribas SA, Citigroup Inc, and Credit Agricole SA.
However, Bloomberg reporting from September 19, noted the absence of the three largest independent oil traders – Vitol Group, Glencore Plc, and Trafigura Group – as well as giants BP and Total.
“The potential that distributed ledger technologies (DLT) have in transforming the commodities sector is clear as evidenced with the success of the Easy Trading Connect experiments,” said Chief Technology Officer Toon Leijtens.
The new trade finance venture, in its aspiration to establish industry norms, is planning two product launches in 2018: a know-your-customer database, which will allow encrypted documents to be exchanged via the blockchain, and a blockchain-based digital letter of credit facility.
Souleima Baddi, a senior trade-finance banker at Societe Generale SA and chief executive officer of komgo SA said, “The launch of Komgo SA highlights a shared vision for industry innovation and underlines the ongoing commitment among members to build a truly open and more efficient network.”
Blockchain is pitched to transform many industries. A recent report by the World Economic Forum predicts that emerging “Fourth Industrial Revolution” technologies like blockchain could reduce a global trade finance gap by $1 trillion.
Komga SA is likely hoping that collaboration among oil and commodities traders and international banks on a trade finance blockchain spurs wider adoption.
Melanie Kramer is a freelance FinTech, blockchain, and cryptocurrency writer based between France and Canada. Melanie has studied, and retains an avid interest in, global politics, business, and economics.
Like what you read? Follow us on X @Bitnewsbot to receive the latest ConsenSys, Shell or other Ethereum business and finance news.
Previous Articles:
- Building Better Programmatic Ads With Blockchain – ThirtyK
- ERC820 Enters Last Call
- Financial Action Task Force To Create Global AML Standard
- Cybersecurity Group Links Illicit Mining To NSA-Developed Exploit
- Banks, Trading Firms Form Blockchain-Powered Commodities Platform – ThirtyK
