Louis Dreyfus Co., one of the world’s biggest foodstuffs traders, teamed up with Dutch and French banks to establish the first agricultural commodity trade to use blockchain.
Bloomberg reports that last December, Louis Dreyfus (LDC) used a blockchain platform to sell a cargo of US soybeans (60,000 tonnes) to China’s Shandong Bohi Industry Co. Blockchain is an electronic ledger which stores records of deals in digital blocks. In theory, this can lead to faster, cheaper and more secure ways of settling transactions.
Dutch banks ING Groep NV and ABN Amro Bank NV, along with Paris-based Societe General SA, helped LDC and Bohi utilise digitised documents for the deal, including contracts, letters of credit as well as government inspections and certifications.
Also read: Blockchain: Its value for the food chain
Commodity traders and trade finance banks, a sector dominated by Dutch and French lenders, are embracing blockchain as a way to reduce costs and administrative tasks, while improving record keeping and tracking for trades. According to the Financial times, the blockchain technology is increasinlgy used in oil trading. BP has been experimenting on a blockchain-based programme alongside Eni, the Italian oil major, and Wien Energie of Austria; and Cargill is operating a pilot blockchain technology to track the provenance of its turkeys, providing consumers with information on where individual birds were raised
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