Another week, another bank investing in distributed ledger technology. Societe Generale, Banco Santander, HSBC and Sveriges Riksbank have all explored the benefits of blockchain technology as they seek to develop simpler and more efficient processes for dealing with financial instruments. Citigroup are now the latest bank to hit the headlines, they announced an increased investment in the Ethereum-based decentralized trade financing startup, Komgo.
Komgo was launched in 2018 and seeks to streamline trade financing in the commodities markets by uploading the relevant transaction data to the blockchain to ensure that such data cannot be tampered with, manipulated, or misplaced, thereby reducing fraud and misrepresentation in the industry. Komgo's blockchain based platform is intended to allow equities traders, financial institutions, and trade service providers to communicate and transact securely across blockchain technology.
Kris van Broekhoven, the global head of commodity trade finance at Citigroup, asserted that distributed ledger technologies create opportunities for modernising trade finance, stating: “the industry has been heavily dependent on the exchange and manual processing of paper documents" for over a century. "Now blockchain technology serves as a catalyst to disrupt the industry towards the processing of electronic data," he added.