Announed on September 19, komgo SA aims to digitalise the commodities trading sector through a blockchain based open platform. The founders of the new venture include: BNP Paribas, Citi, ABN AMRO, Crédit Agricole Group, Gunvor, ING, Koch Supply & Trading, Macquarie, Mercuria, MUFG Bank, Natixis, Rabobank, Shell, SGS, and Societe Generale.
ABN AMRO, ING, and Societe Generale were the initial founders of the idea. During the two pilots, they tested if a blockchain platform could digitalize administrative processes around commodity financing and trading.
“komgo SA will be the open decentralized platform for trade and commodity finance that aims to achieve two main purposes. Firstly, to become the leading digital one-stop shop for the industry. And secondly, to lead the evolution of the ecosystem, by bringing new innovative services to the customers, and additional liquidity providers to the market,” ING CEO, Ralph Hamers, said via email.
komgo SA is expected to launch two products by the end of the year. The first will standardize and facilitate KYC processes without using a central database. Documents will be encrypted and exchanged over the blockchain and decrypted at relevant points. The second product will be digital letters of credit, allowing commodity houses or other platforms to submit digital trade data and documents to komgo SA customer banks of their choice.
“The decentralized platform provides better data governance, as no single party is in control. This will enhance security through strong encryption, more legal certainty through immutability, and traceability through a robust audit trail,” Hamers told bobsguide.
The platform will be developed in partnership with ConsenSys, the largest formation of technologists and entrepreneurs building applications, infrastructure, and solutions on the Ethereum network.
“The launch of komgo SA highlights a shared vision for industry innovation and underlines the ongoing commitment among members to build a truly open and more efficient network within commodity trading,” said Souleïma Baddi, CEO of komgo SA.
“The use of the blockchain technology allows truth by design and accessibility to all permissioned users. These are key to providing automated contract execution, alongside other technologies that will bring the automation of reconciliation and secured outside information,” said Hamers.