Shell, BP and ING are betting big on blockchain. They are part of a new group seeking to develop a blockchain based digital platform for post-transaction management of physical energy commodities trading. The platform is expected to be operational by the end of 2018, pending relevant regulatory approvals, according to the group.

The consortium participants also includes energy company Statoil; trading houses Gunvor, Koch Supply & Trading, and Mercuria; and banks ABN Amro and Societe Generale.

The group intends to create a secure, real-time blockchain-based digital platform to manage physical energy transactions from trade entry to final settlement. The intent is to move away from traditional and cumbersome paper contracts and operations documentation to secure, smart contracts and authenticated transfers of electronic documents.

The platform will be open to the commodity industry and designed and stress-tested by its investors who constitute a key segment of its user base.

The platform aims to reduce administrative operational risks and costs of physical energy trading, and improve the reliability and efficiency of back-end trading operations for all supply chain users, while also opening the door to innovative funding and financing solutions.

By combining the expertise of some of the largest players in energy and commodity trading with the trade finance credentials of established banks in this space, the new venture will benefit from its shareholders’ ability to implement projects, as well as their first-hand understanding of the operational and process opportunities that digitalisation presents.

Over time, the new venture intends to lead the migration of all forms of energy transaction data to the blockchain, improving data quality, further strengthening security and increasing the speed of settlements industry-wide, while reducing the cost for industry participants.

Similar blockchain based technology is also being explored in digital marketing and national currencies.

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