Major new platform hopes to revolutionize the sector
This week a consortium of banks, energy companies, and trading companies launched a new venture which it hopes will be the future of commodities trading.
Using the burgeoning blockchain technology, komgo SA aims to digitize the trade and commodities finance sector, which will be an open platform. Blockchain is considered a more secure, faster, way to manage transactions and is being trialled or adopted by many financial institutions.
“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 Souleïma Baddi, Chief Executive Officer of komgo SA.
The list of founders is impressive and includes ABN AMRO, BNP Paribas, Citi, Crédit Agricole Group, Gunvor, ING, Koch Supply & Trading, Macquarie, Mercuria, MUFG Bank, Natixis, Rabobank, Shell, SGS and Societe Generale.
The tech side of the platform is the domain of ConsenSys, a group of technology experts and entrepreneurs using the Ethereum network.
komgo SA expects to launch two products by the end of 2018, one that will handle ‘know your customer’ checks, and one to manage digital letters of credit.
Although others have tried to make blockchain-based commodities trading the norm, the developers of komgo SA believe that a recent proof of concept demonstrates the potential for their platform.
“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 Toon Leijtens, Chief Technology Officer of komgo SA. “We can now achieve a long-term ambition to improve security and operational efficiency in the commodity trade finance sector.”
