A group of large banks and trading firms will soon launch an open trading platform based on the blockchain system, with the help of which the contracts for commodities supply, from oil to wheat, will be concluded. A new platform called komgo SA will function as an independent organization and will be registered in Geneva.
Such companies as Societe Generale, Shell, Natixis, Mercurial, Koch Supply & Trading, Gunvor, Citi, ABN AMRO, BNP Paribas, Crédit Agricole Group, ING, MUFG Bank, Rabobank and SGS are working on the platform. Meanwhile, the platform is open to new participants.
"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.
Turning to the blockchain technology, the developers of the platform expect that trading operations will be carried out within a few minutes. At the same time, the transparency of transactions will be increased and the risk of fraud will be reduced. Numerous participants in the supply chains of oil or other commodities will no longer have to send each other a lot of papers that confirm each step of the trading transaction. Instead, a trader will be able to use a digital letter of credit, which will conduct transactions much faster.
From the start, komgo SA will be used for the energy industry. The first operations will be crude cargoes in the North Sea. In early 2019, trades through the platform will affect new areas: contracts for the supply of metals and agricultural products will be concluded. Over time, the scope of the platform will only expand.