International banks and commodity giants have partnered with Royal Dutch Shell Plc to create komgo SA, a blockchain-based platform for financing the trade of commodities, which they hope will serve as an industry standard.
“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.”
According to the group, the platform will be developed in partnership with ConsenSys, the largest formation of technologists and entrepreneurs building applications, infrastructure, and solutions on the Ethereum network.
komgo SA will start with two products, expected to launch before year end, the group stated. The first one will standardize and facilitate KYC process without using a central database: the exchange of documents will be executed in an encrypted way over the blockchain on a need to know basis.
The second product will be digital letters of credit, allowing commodity houses or other platforms to submit digital trade data and documents to komgo SA customer banks of their choice.
The founders of this new company, managed and operated as an independent entity, include companies from: ABN AMRO, BNP Paribas, Citi, Crédit Agricole Group, Gunvor, ING, Koch Supply & Trading, Macquarie, Mercuria, MUFG Bank, Natixis, Rabobank, Shell, SGS and Societe Generale.