Banks back first commodities blockchain platform
Written by Hannah McGrath
Banks and trading firms are to launch the world’s first blockchain platform for commodities trading.
The new platform developed by Komgo SA, a Genava-based company, is backed by 15 major investment partners and is expected to launch before the end of 2018. Banks and commodities companies that have partnered on the venture include ABN Amro, BNP Paribas, Citibank, Credit Agricole, AIG, Rabobanks, Shell and Societe Generale.
Komgo says the use of blockchain technology to trade a range of commodities from wheat to oil will transform the commodities industry by enhancing efficiencies and improving security.
The use of digital ledgers will limit operational risks of fraud, counterfeiting or human error, speed up transactions and unify data on a single platform, according to Komgo.
The initial trades on Komgo will focus on energy commodities, including crude oil cargoes in the North Sea, and will be followed by agriculture and metals trading from early next year.
Souleïma Baddi, chief executive 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 within commodity trading.”
The platform, built on Ethereum blockchain, is being developed in partnership with technology firm ConsenSys.
Last month, the World Bank announced it had chosen Commonwealth Bank (CBA) to be the sole arranger of the first global bond to be created, allocated, transferred and managed using blockchain technology.