Catalyzing the Global Trade and Commodities Finance Network with Blockchain
The world鈥檚 first blockchain-based platform for the commodity trade ecosystem.
komgo acts as a single source of truth, allowing traders, carriers, banks, and other authorized participants to securely transact in a highly efficient, digitized way, resulting in industry-wide simplification of operations and standardized documentation.
Just one year after its public launch, komgo supports close to 1 billion USD of financing channeled by network members. komgo is backed by 15 of the world鈥檚 largest global banks, trading companies, and oil giants, and is adding new members at a rapid rate.
聽
聽
The Challenge
Rapid globalization has outpaced the trade finance industry鈥檚 ability to standardize and digitize its system of record-tracking. The exchange of commodities鈥攅ach with its unique regulations, shipping specifications, and certification requirements鈥攊s currently managed across various borders and jurisdictions using an ineffective, issue-prone, antiquated paper-based system of record tracking.
Among these issues are miscommunication and fraud, security vulnerabilities, manual, repetitive tasks, long verification times, and losses due to transaction fees, invoice factoring, and delayed payment methods. It has been historically challenging to make significant technological improvements in trade finance operations for various reasons, including the number of diverse stakeholders located across the globe and the complexity and volume of business transactions. Fractured processes and regulation dissonance contribute to the $1.5 trillion-dollar supply-demand gap in global trade finance.聽
聽
See Citi鈥檚 Global Head of Commodity Trade Finance explain how some of the world鈥檚 largest institutions are coming together to build an end-to-end blockchain solution for commodities trade financing.
聽
The Enterprise Ethereum Solution
komgo is a blockchain-based trade financing platform and network-based on JP Morgan鈥檚 Quorum. It is connected to another live Ethereum platform, VAKT, a blockchain-based post-trade processing platform for commodities. The komgo platform has a proprietary document transfer system called Kite that allows secure transfer without revealing the contents to komgo. This framework utilizes distributed ledger technology to tackle fraud, increase efficiency, and digitize trade.聽
The komgo platform facilitates significantly increased transparency, while its 鈥減rivacy by design鈥 architecture permits private peer-to-peer transactions. This design model radically enhances trust and accelerates access to trade finance by reducing operational procedures and lowering the risks of failures and fraud across the industry. Authorized parties include 鈥奲anks, commodity traders, energy corporates, inspection companies, and the broader ecosystem of participants.聽
komgo partnered with ConsenSys and Kaleido to develop their blockchain solution and聽 鈥榩roductize鈥 itself for a large number of participants at an accelerated pace. Enterprise blockchain enables a tamper-proof KYC record that meets Anti-Money Laundering (AML) regulations; it uses a shared ledger to improve access to accurate information across the ecosystem, and it provides private data exchange based on permissions.聽
In a few short months, komgo was able to deploy a secure digital platform where authorized parties can store data, exchange transactions, and send messages based on permissions.聽
-
Cost-saving: komgo brings an estimated 30-40% increase in cash-flow gains across the entire production chain due to streamlined operations. The platform is expected to facilitate a 20-50% reduction in operational cost pending industry-wide adoption. Increased gains projected as the project matures.聽
-
Simplicity: The komgo network allows banks, traders, and other participants to all transact off the same secure software, resulting in industry-wide simplification of operations and communication on a scale never before possible.
-
Efficiency: The komgo network is a decentralized solution to information sharing. Documentation and data are shared directly between transacting participants with immutable, transparent timestamps, thus removing the lag-time involved with third parties.
-
Security: komgo鈥檚 blockchain-based software ensures that data cannot be tampered with, manipulated, or misplaced. Additionally, access to particular information is tightly controlled, assuring that only chosen participants can view relevant documentation.
komgo is backed by 15 of the world鈥檚 largest commodity trade and finance companies: ABN-AMRO, BNP Paribas, Credit Agricole, Citi, Gunvor, ING, Koch Supply & Trading, Macquarie, Mercuria, MUFG Bank, Natixis, Rabobank, SGS, Shell, Societe Generale.
