The first blockchain platform to finance trading of commodities is launching by joint efforts of global banks and trading firms. Switzerland-based venture komgo SA will be controlling this commodity platform. It is expected to go live at the end of 2018.
The komgo founders incorporate ABN AMRO, BNP Paribas, Citi, Crédit Agricole Group, Gunvor, ING, Koch Supply and Trading, Macquarie, Mercuria, MUFG Bank, Natixis, Rabobank, Shell, SGS and Societe Generale.
There have been numerous pilot schemes across the commodities hosted by banks and major trading firms. However, this venture will be the first that any firm can join.
A digital letter of credit can overcome the long procedures of sharing a heap of printed material between an extensive rundown of gatherings, accelerating transactions significantly.
Blockchain platform is considered as a solution to trade and settlement inefficiency. It enhances transparency by reducing the risk of fraud. A high-tech ledger, blockchain utilizes a shared database that updates continuously. It can process and settle transactions in minutes without the requirement for third-party verification.
komgo will initially be utilized for the energy industry. The first trades will be crude cargoes in the North Sea, the benchmark-setting district for world’s crude trading. The new venture will work alongside Vakt, an energy trading platform. It has many of the same shareholders as komgo.
As reported by Cointelegraph, the core development group supporting komgo is responsible for two apparently successful blockchain based proof-of-concept (PoC). It has been tried for energy and soft commodities trading, named “Easy Trading Connect 1” and “Easy Trading Connect 2.”
“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 within commodity trading,” said Souleima Baddi, Chief Executive Officer of komgo SA.
Reuters reported that the blockchain platform will be created in association with ConsenSys. komgo has the capacity to scale itself up for new and emerging commodities and will provide finance for all the commodities via Blockchain.
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