Introducing Komgo: First Blockchain Platform For Commodity Trading
Commodity traders, energy majors, and large banks have set up a new venture to digitize and facilitate commodity trade through a blockchain-based open platform, Societe Generale announced in a September 19 press release.
Swiss Consortium Drives Blockchain Adoption
Global banks and trading firms are launching the first blockchain-based platform for financing the trading of commodities from oil to wheat, Reuters reported on September 19.
The platform will be run by a venture called komgo SA, based in Geneva, Switzerland, and is due to go live sometime near the end of 2018.
According to a September 19 press release, Societe Generale said that the venture would see the participation of Big Oil’s Shell—which has a vast commodity trading division—commodity traders Gunvor, Mercuria, and Koch Supply & Trading, as well as banks ABN AMRO, BNP Paribas, Citi, Crédit Agricole, ING, Macquarie, MUFG Bank, Natixis, and Rabobank, as well as inspection, verification, testing and certification company SGS.
Oil Price reported that komgo SA aims to launch two different products before the end of 2018. The first product will standardize and facilitate the know-your-customer (KYC) protocol without using a central database, while the second will be digital letters of credit, allowing commodity houses or other platforms to submit digital trade data and documents to banks of their choice.
Ethereum-Powered Commodities Trading
Societe Generale also revealed that the platform would be developed in partnership with ConsenSys, the most extensive formation of technologists and entrepreneurs building applications, infrastructure, and solutions on the Ethereum network.
Joseph Lubin, co-founder of Ethereum, and founder of ConsenSys said that the company was “thrilled” to work with komgo SA and that the venture will “simplify and accelerate trustworthiness, auditability, and accessibility to trade financing across the industry.”
Reuters also indicated that komgo SA would initially be deployed in the energy sector in the crude cargoes business in the North Sea. From there, the platform will extend its services to the metals and agriculture industries.
To achieve these goals by the end of 2018, komgo SA partnered with VAKT, a blockchain-powered oil trading company. Energy majors BP, Equinor, and Shell, commodity traders Gunvor, Koch, and Mercuria, and banks ABN AMRO, ING, and Societe Generale are all members of VAKT.
A press release from Societe Generale explained that due to a substantial overlap of shareholders between komgo SA and VAKT, the two companies would explore synergies between both platforms moving forward.