No one can deny banks all over the world favor blockchain technology. So far, most of the projects are kept under tight wraps. Various European banks are now teaming up with major energy giants. The goal is to create a blockchain-based digital platform for energy commodities trading. A rather interesting venture that may come to fruition very soon.
Partnerships between banks and energy giants are nothing new these days. Such agreements have existed for decades. In most cases, the purpose of such a partnership has nothing to do with blockchain technology. Now that we live in 2017, that situation has come to change. More specifically, various European banks and energy giants want t focus on a new platform. ABN Amro, Societe Generale, and ING make up the institutions focusing on this new effort. They are joined by Shell, Statoil, Shell, and a few unnamed trading houses.
A Major use Case for Blockchain Technology
Building a digital platform to trade energy commodities makes a lot of sense. It is evident something will need to change compared to how these trades occur right now. Using blockchain technology to achieve this goal is a logical choice as well. Whether or not it can go live by late 2018, remains to be determined. This initial deadline may need to be adjusted depending on how long regulatory approval takes. A project on this scale will have a lot of potential, assuming it ever comes to fruition.
ING’s Anthony van Vliet comments as follows:
“Marquee brands and competitors in the energy, trade and banking industry sharing one vision gives us a great opportunity to transform processing in the energy trade commodity sector.”
Paper contracts have become far too cumbersome to deal with. This energy commodity trading industry needs to be streamlined and undergo major backend upgrades. With the blockchain, administrative operational risks will hopefully be reduced over time. Moreover, it will help reduce the costs of physical energy trading. For now, these plans are rather ambitious. Without regulatory approval, this venture will go nowhere anytime soon. At the same time, some very powerful entities are joining forces. The future looks very interesting for this industry, that much is certain.
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