Banks and traders launch blockchain energy trading platform
A group of banks and commodity-trading companies have combined with one of the world’s biggest energy producers to launch a blockchain platform they hope will revolutionise commodity trade finance.
The new venture, announced on Wednesday and called Komgo, was founded by a group of 15 companies that includes banks and commodity traders Macquarie, ABN Amro, BNP Paribas, Citi and Crédit Agricole along with energy company Royal Dutch Shell, and will digitise the trade and commodities finance sector through a blockchain-based open platform.
Komgo joins Vakt, another blockchain-based processing platform announced in June. Both projects aim to simplify processes within commodity trading improving security and operational efficiency and both are expected to become operational by year end.
Komgo’s chief executive Souleïma Baddi, said the ethereum-based platform was the product of “a shared vision for industry innovation” and noted a commitment “to build a truly open and more efficient network within commodity trading”.
One of two planned products from Komgo will allow an exchange of documents to be executed in an encrypted way over the blockchain on a need-to-know basis, while the second will be digital letters of credit, allowing commodity houses or other platforms to submit digital trade data and documents to customer banks of their choice.
Vakt’s aim is for a single-source for the post-trade processing lifecylce and eliminating reconciliation and paper-based processes. It will manage physical energy transactions on a distributed ledger to create a secure, trusted ecosystem for counterparty interaction.