ING, SocGen and ABN Amro run agricultural commodity trade on shared ledger

Galtero Lara
Enero 26, 2018

Blockchain technology, a digitised and decentralised replacement for traditional transaction tracking and settlement, has been touted as having the potential to reduce costs in nearly every industry.

The platform was used for executing a soybean shipment transaction from the U.S.to China.

Louis Dreyfus Company (LDC) and a group of major banks have successfully completed the first full agricultural commodity transaction via a blockchain platform.

ETC was first validated with an oil cargo transaction in February 2017, with the subsequent launch in November 2017 of an energy consortium aiming to offer "blockchain-based" services to the energy sector. Time spent on processing documents and data has been reduced fivefold.

Dutch banks ING Groep NV and ABN Amro Bank NV, along with Paris-based Societe General SA, helped LDC and Bohi utilise digitised documents for the deal, including contracts, letters of credit as well as government inspections and certifications. The platform's success demonstrates the enormous potential of distributed ledger technologies to advance commodity trading and financing, according to ING.

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The three banks behind Easy Trading Connect previous year joined forces with oil giants BP, Shell and Statoil, as well as several trading houses to build a blockchain-based digital platform for energy commodities trading following a successful test on an oil cargo transaction in February. The role of the participant banks was to issue the letter of credit, a necessary financial instrument in the trading process. Russell Marine Group and Blue Water Shipping issed all required certificates. The US Department of Agriculture (USDA) provided valuable insights on how to include phyto-sanitary certificates in the process.

"One thing is clear: the digital revolution is transforming the commodities sector", said Gonzalo Ramírez Martiarena, Chief Executive Officer of Louis Dreyfus Company.

"The next step is to harness the potential for further development through the adoption of common standards, and welcome a truly new era of digital trade flow management on a global level", he was quoted as saying.

This was a huge advance in the worldwide trading business.

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