China made it to the history books after undertaking a successful commodity trade with Singapore by using the blockchain technology. The transaction was unique as blockchain technology facilitated and optimized the entire process of trade.
Sinochem Corporation, a major state-owned oil company in China, initiated the process by conducting a trade with the state of Singapore in which paperwork was replaced by blockchain technology.
The trade was managed by Sinochem Energy Technology Co. Ltd, a subsidiary of Sinochem Corporation to ship gasoline to Singapore. To boost its fast-growing economy, China has become totally dependent on the import/export of energy to and from various countries. Therefore, it is using all the option to maximize efficiency in its trade with other countries.
Being one of the four big state-owned Chinese oil companies, Sinochem Corporation directed the trade from the coastal city of Quanzhou. It was the first time blockchain technology was applied from the start till the completion of the shipment.
Energy trading has always been a long and tiresome process, but the blockchain technology was able to simplify the process by automatically creating and ending smart contracts and saving time and labor in the process. It can be further used for recording key documents and digitizing them quicker than any technology known to mankind.
It was not the first time Sinochem group experimented with the blockchain technology. The firm used the breakthrough technology for importing crude oil in December 2017. This time, the company was focused on using the technology in the entire shipment of oil as an export.
The blockchain technology has already been used in the supply chain and logistics industries and the ever booming real estate business.
China was also involved in an agriculture trade with the US at the beginning of 2018 using the blockchain technology. The whole process involved five separate parties that co-ordinated through blockchain to carry out a cargo shipment of soybeans via ETC (Easy Trading Connect).
Similarly, JD.com, a Chinese retail company, is also trying to induce the blockchain technology in its framework. It aims to use the technology to ensure the quality standards of products being sold and delivered by the store. Moreover, it would allow customers to track their orders in real time.
To assist commodity trading the blockchain technology normally uses smart contracts for the management of data of the parties involved in the transaction and the self-execution of tasks. It has given a long lasting and trustworthy solution to issues prevalent in the financial transactions of commodity trading.
As soft commodities trading highly depends on market volatility, risk management, and supply chain supervision matters. Blockchain makes the process easy by eliminating all the problems that traders face when data is recorded on paper. Ex- it saves a lot of time.
Blockchain technology is being backed by almost all the governments around the globe. It won’t be too early to say that future will be dominated by a superior blockchain technology.