Big oil and energy firms are building a trading platform based on blockchain
Royal Dutch Shell, BP and a number of other firms have created a consortium that will develop a digital platform for trading energy commodities that leverages the power of the blockchain.
Blockchain is the underlying technology that famously allows cryptocurrencies such bitcoin to exist.
The technology uses a shared database and processes transactions securely within minutes. This could cut out the need for a third party to verify a transaction.
“The new venture seeks to create a secure, real-time blockchain-based digital platform to manage physical energy transactions from trade entry to final settlement. In doing so, it digitalises the process and allows the sector to move away from traditional paper contracts and operations documentation,” said ING in a statement.
ING is one of three banks involved in the consortium.
Than bank says that this new venture should help to reduce administrative operational risks of physical energy trading.
“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, ING global head of trade Anthony van Vliet said in a statement.
The members of the consortium include oild firms BP, Shell, and Statoil as well as banks ABN Amro, ING and Societe Generale. Trading houses Gunvor, Koch Supply & Trading and Mercuria are also involved in the project.
Reuters reports that the platform is expected to start trading from the end of 2018.
[Source – Reuters] [Image – CC BY 0 Pixabay]