Blockchain in Commodities… More than Hype?

Introduction There has been more than significant interest in blockchain in the world of commodities over the last couple of years. While, at times, some of this interest may have been only hype, we are now beginning to see some small-scale commercial application of blockchain, or perhaps more accurately, distributed ledger technologies (DLT), emerge via consortia in the space such as the Vakt initiative, for example. Many of these blockchain projects have focused in on the post-trade world of settlement and reconciliation. Areas where blockchain, or DLT, may potentially result in a paradigm shift in approach are those were there are compatibility, trust and/or transparency issues among and between both systems and participants. Traditionally and historically, players like traders, brokers, regulators, exchanges, insurers, banks and other parties have had to go through a lot of processing that often involves middlemen and have dependencies that can take a lot of time and effort to resolve and process. By applying blockchain and smart contracts to some of these post-trade activities, much of these issues may be eliminated while also speeding up trade settlement. What are the main benefits of Blockchain? Among the often-cited benefits of blockchain are improvements like streamlined and/or real-time… continue reading

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