Banks Will Build a Blockchain Trading Platform

Banks Will Build a Blockchain Trading Platform

ABN Amro, ING, and Societe Generale are working in collaboration with oil companies BP, Shell and Statoil, as well as several trading houses.

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ABN Amro, ING, and Societe Generale are working in collaboration with oil companies BP, Shell and Statoil, as well as several trading houses.

The goal is to build a blockchain-based digital platform that will be used for energy commodities trading. The platform will reportedly manage physical energy transactions like trade entry and final settlement, among others.

The venture will run as an independent entity that is open to the industry, as some of the partners explained. The idea is to eliminate traditional paper contracts, while securing smart contracts and authenticated transfers of electronic documents, according to a recent publication that appeared at Finextra. Commenting on the subject, Athony van Vliet, the global head, trade and commodity finance at ING, said:

“Marquee brands and competitors in the energy, trade and banking industry sharing one vision gives us a great opportunity to transform processing in the energy trade commodity sector.”

The collaborative deal between banks, oil companies and trading houses hopes to reduce administrative operational risks and costs of physical energy trading. At the same time, the newly gathered team wants to improve the reliability and efficiency of back-end trading operations for all supply chain users, while remaining open to investments intended for innovation.

Further, it is hoped to mitigate all forms of energy transaction data to the blockchain in the long run. The latter is expected to improve data quality, while strengthening security and increasing the speed of settlements. Also, it is claimed that these improvements can potentially reduce the cost for industry participants.

This is not the first such project, where ING takes a leading role. The Dutch bank has previously co-worked with Societe Generale and energy and commodity group Mercuria to test the use of blockchain technology for oil trade.

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