In December 2016, Australian-based AgriDigital has successfully executed the world`s first live settlement of a physical commodity on a blockchain, wr
In December 2016, Australian-based AgriDigital has successfully executed the world`s first live settlement of a physical commodity on a blockchain, wrote Australian Financial Review (aft.com).
Led by Australian start-up Full Profile, AgriDigital is an integrated, cloud-based platform that manages contracts, deliveries, invoices, payments and inventories.
AgriDigital`s pilot used a private version of the Ethereum blockchain to design “smart contracts” that can be used to sell grain, reported Australian Financial Review.
As grain trade problems in Australia has cost the country millions of dollars, the pilot comes just in time to provide solution. According to a report by the Victorian Farmer Federation Grains Group quoted in Australian Financial Review, in 2014, grain growers in the country lost about $50 million due to trade insolvencies.
Getting a commodity like grain from the grower to the consumer currently involves a complex web of distribution, logistics and broker relationships, said Emma Weston, the co-founder of Full Profile in an interview with Australian Financial Review.
“With this new technology, we can remove counterparty risk so that buyers and sellers can operate in confidence as they did in the past.”, explained Weston.
Apart from providing security, the blockchain technology can offer grain buyers flexible financing options. Also, there are opportunities for tracking provenance. It can be an important step to reduce food fraud in international export markets.
Future opportunities lie in connecting grain and other commodities to the internet of things, said Weston before the Australian Financial Review.
“Agriculture has been characterised by high levels of competition and there are many entrenched players across the supply chain, including the financing of the supply chain,” explained she.
Blockchain technology will remain in focus in 2017 as different sectors like banking and agriculture continue experimenting with it.