LONDON (ICIS)--The first full agricultural commodity transaction using a blockchain platform has been completed successfully, reducing the time spent on processing documents and data fivefold, ABN AMRO, Louis Dreyfus Company, Shandong Bohi Industry Co, ING and Societe Generale, said on Monday.
It involved the shipment of soybeans from the US to China between the two companies with the banks issuing and confirming the letter of credit.
The partners in the blockchain concept test said that Russell Marine Group and Blue Water Shipping issued all required certificates in the process.
The US Department of Agriculture (USDA) advised on how to include phyto-sanitary certificates in the end to end encryption process.
“The blockchain technology has the potential to significantly optimise administrative processes around international trade,” Karin Kersten, Head of Trade & Commodity Finance at ABN AMRO said.
The transaction mirrored the paper-based process. Efficiencies were demonstrated by participants along the distribut4ed ledger technology (DLT) chain, the test partners said.
“The platform’s success demonstrates the immense potential of distributed ledger technologies to advance commodity trading and financing,” they added.
The Easy Trading Connect (ETC) platform was used in February last year in an oil cargo trade and an energy consortium aiming to offer blockchain services to the energy sector was launched in November.
A modified platform accommodated the agricultural sector’s documentation flows covering financing, documentation and the processing of the original sales contract.
Benefits included the ability to monitor the operation's progress in real time, data verification, reduced risk of fraud, and a shorter cash cycle, Louis Dreyfus and the other partners said.