Commodities market consortium to explore blockchain for post-trade

Commodities market consortium to explore blockchain for post-trade

Post-trade technology company Kynetix is working with a consortium of industry stakeholders to explore the use of distributed ledgers in handling title ownership and transfer in the commodities market.

The UK company, which supplied the backbone technology for the LMEsword and ICE Guardian platforms, has assembled a coalition of 15 commodity exchanges, investment banks, clearing houses and brokers to discuss the merits and challenges of collaborating on a blockchain initiative.

The group will hold an inaugural meeting tomorrow at London's Innholders Hall to explore the potential benefits of applying blockchain technology within the commodities trade lifecycle.

Guillaume Kendall, head of business development at Kynetix, says: "Our aim is to bridge the cap between the physical economy, the financial markets an blockcghain technology in order to help the participants of the consortium explore and define the key areas where blockchain could be applied to this very unique physical marketplace."

The initiative is the latest in a series of collaborative projects underway in the financial markets. Thirty global banks are participating in a project led by R3 to define a set of global standards and protocols for the use of blockchain in financial services, while major capital markets firms - including the LSE, LCH Clearnet, CME Group, Euroclear and UBS - have set up a group to examine how the technology can be used for trading, clearing and settling securities.

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