Some of the world's biggest banks, including Citi, MUFG and Societe Generale, have joined forces on a venture bidding to digitalise the trade and commodities finance sector through a blockchain-based open platform.
Dubbed komgo SA, the new independent entity has the backing of 13 banks and trading companies - ABN Amro, BNP Paribas, Citi, Crédit Agricole, Gunvor, ING, Koch Supply & Trading, Macquarie, Mercuria, MUFG Bank, Natixis, Rabobank, and SocGen - as well as energy giant Shell and inspection outfit SGS.
Developed in partnership with ConsenSys, the decentralised Ethereum blockchain-based platform is aiming to launch before the end of the year with two products.
The first will standardised and facilitate KYC processes 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 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.
To build the platform, komgo has hired the team behind two major proof-of-concepts under the Easy Trading Connect prototype. That prototype, which was backed by ABN Amro, ING and SocGen, successfully tested trades in oil and agricultural commodities.
Souleïma Baddi, CEO, komgo SA, says: "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."