A routine soybean shipment from the USA to China has been made famous as it is the first commodity deal that has been facilitated by blockchain technology. This is the first of its kind.
Pilot runs have been investigated for some time now, but this seemingly insignificant shipment of soybeans marks the first end-to-end real world transaction. The transaction happened on the back of tech, which was developed by the banks themselves. The transactions are normally incredibly paper-heavy, and digitising this transaction shortens this administrative aspect of the trade to around 20 percent of a typical transaction.
This recent transaction shows just how blockchain technology is becoming more accepted and being used for every day transactions. This has dramatically changed from the days in which it was just linked to Bitcoin.
Ironically, banks, who are often very against the idea of blockchain technology are the ones who stand to benefit the most. Santander UK estimated back in 2015 that around $20billion could be saved by employing blockchain technology. An expert agrees, saying;
“Distributed ledger technologies have been evolving rapidly, bringing more efficiency and security to our transactions, and immense expected benefits for our customers and everyone along the supply chain as a result.”
The MD of global IT and Delivery at Gazprom, Catherine Newman, has said;
“Although it is early stages yet, the proof of concept with BTL represents an exciting and potentially disruptive prospect in the near future.”
HSBC and Deutsche Bank have both introduced a blockchain technology to trade financing, along with Citi, who have generated a startup geared towards servicing foreign exchange markets via the blockchain platform.
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