A group of companies including IBM has spearheaded the development of a new blockchain-based crude oil trade finance platform.
Along with IBM, commodities trading group Trafigura and corporate investment bank Natixis took part in the creation of the platform, built using code from the Linux Foundation-led Hyperledger project. IBM’s BlueMix cloud hosting service is also being utilized.
Within the system, parties can view transaction data as it is published on the blockchain. The platform also hosts documentation and updates on shipments, deliveries and payments.
Natixis, a member of the R3 distributed ledger consortium, is no stranger to trade finance applications of blockchain, having joined with the "Digital Trade Chain" project last year.
According to Arnaud Stevens, Natixis’ head of global energy and commodities in New York, the bank sees the tech as potentially bringing down costs while also boosting procedural transparency.
Stevens said in a statement:
"We want to use blockchain to optimize the antiquated arena of commodity trade finance. The current process is paper and labor intensive, we have multiple friction points with high processing costs and limited automation. Distributed ledger technology brings some much-needed innovation into our industry."
The platform’s introduction marks the latest bridging of the blockchain and trade finance worlds. It’s an application that has attracted significant interest from a range of companies and governments worldwide, including Dubai.
Many of the world’s banks also continue to push ahead with related projects focused on the commodities trade.
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