French investment bank Natixis, energy trading giant Trafigura and IBM have announced that they are using blockchain technology to streamline commodity trade financing for US crude oil transactions.
“Natixis wants to use blockchain to enhance client service by optimizing the antiquated arena of commodity trade finance,” said Arnaud Stevens, Natixis’ New York Head of Global Energy & Commodities. “The current process is paper and labor intensive, we have multiple friction points with high processing costs and limited automation. Distributed ledger technology brings some much-needed innovation into our industry.”
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“Processes in the energy and commodities trade business are ripe for improvement,” said James Wallis, Vice President, blockchain markets and engagements, IBM. “The approach we are taking, using a permissioned blockchain network built on the Hyperledger Fabric, has the potential to transform the crude oil industry by creating consistency in trade finance and by digitizing transactions and information sharing. Creating this ecosystem for the commodities market working with two world leaders in this industry will help create an entirely new approach to managing the global commodities trade.”
“The goal is to replace paper-heavy manual processes with blockchain-based workflows to improve transparency and data sharing. With the distributed ledger technology, all transaction participants in the network are updated simultaneously with a record that cannot be altered or tampered with. Each change or new transaction immediately creates a new record in the shared ledger,” said Rodney Malcolm, Trafigura Trading’s North American Chief Financial Officer.
Natixis’ CIB Head of Digital, Frederic Dalibard, said: “This partnership with IBM and Trafigura represents great momentum for Natixis and supports our aim to move distributed ledger technology from vision to execution.”