In a landmark move, wheat paid for in Bitcoin was shipped to Turkey from Russia last month, according to Bloomberg.
The entity behind the transaction is called Prime Shipping Foundation, an open-source project from Gibraltar-based Quorum Capital. Visitors to its website are greeted with the words: “World first token for shipping industry [sic]”.
The global shipping industry is a trillion-dollar business, and transactions are mostly executed with the US dollar. Prime Shipping Foundation will be launching an ICO in mid-2018 for its token, called PRIME. The idea behind the project is to cut operating expenses for shipping operations by increasing the efficiency of payment processing and document verification by conducting these activities on a blockchain platform. Prime Shipping Foundation aims to acquire a banking licence in Gibraltar, which recently became the first jurisdiction to regulate ICOs.
The system will likely be a boon to countries which find themselves under international sanctions, limiting their ability to import food.
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The pilot deal entailed 3,000 tonnes of wheat being transported from Rostov-on-Don to Samsun. CEO Ivan Vikulov said to Bloomberg: “As far as we know, this is the first freight deal done in a cryptocurrency.”
Earlier this week, we reported on another first blockchain-based agricultural commodity transaction, in which soybeans were purchased by Chinese firm Shandong Bohi Industry from American firm Louis Dreyfus Company. The US Department of Agriculture was also involved in the process, providing guidance on hygiene certificates.
The transaction was conducted on a blockchain platform called Easy Trading Connect, and the fully digitalised process reduced the time spent on document and data processing by a factor of five, according to the parties involved.
Gonzalo Ramírez Martiarena, CEO of Louis Dreyfus Company, said at the time: “One thing is clear: the digital revolution is transforming the commodities sector.”