A blockchain-based ‘intelligent contract platform’ has been used by mining giant Rio Tinto to complete a fully digitalised iron ore trade.
While it usually takes several days for commodity contracts to settle, the companies were able to complete the fully digitalised trade in under two hours.
“This is a technological milestone for the industry, and we are delighted Rio Tinto and Cargill Metals chose to partner with us and use our ICP as the core technology to create this advance,” says Chinasay CEO, Colin Hayward.
The successful trade is expected to encourage the use of blockchain technology throughout the ferrous metals industry according to Lee Kirk, Managing Director of Cargill’s Metals business.
“This is a great example of how we can leverage advancements in technology to benefit from increased speed, transparency, and efficiencies that enable us to serve our customers and suppliers better,” says Kirk.
Blockchain trade follows Rio Tinto ‘letter-of-credit’ transaction
Rio Tinto and Cargill are becoming blockchain pioneers in the metals trading sector. Both companies are continuing to invest in blockchain research and development.
In November last year, Rio and Cargill used blockchain to complete a payment for iron ore shipped from Australia to China.
International bank, BNP Paribas issued a letter of credit over a blockchain on behalf of Cargill to HSBC Singapore, acting on behalf of Rio Tinto.
While only the final payment in the process used blockchain, it was a precursor to the fully digitalised trade just executed.
“Blockchain technology is an important pillar in our innovation agenda and we believe that transactions like this one will help achieve greater efficiency and transparency in trade finance for the benefit of all players in this space,” said BNP Paribas executive, Zoran Lozevski at the time.
“The future of trade finance is digital and paperless, and BNP Paribas is pleased to be at the forefront of changes that will make facilitating trade even easier for our clients.”
Private sector leading blockchain research and development
Leigh Travers, the CEO of Australian blockchain technology development company, DigitalX, recently wrote an opinion piece for Micky News, criticising governments for dragging their feet on blockchain adoption.
“Why wouldn’t you back what’s been called ‘the biggest technological revolution since the internet’?” he wrote.