ING Explores Blockchain Innovations To Digitize Commodity Trades
Global financial institution ING shot into 2017 with Q1 reports indicating a net profit of 1,143 million euros: a 39.3 percent pretax growth compared to 2016 Q1 results.
In a press release, ING CEO Ralph Hamers acknowledged innovations in blockchain technology.
Hamers details a wholesale trading milestone that was pioneered by Easy Trading Connect, ING's community owned platform which is powered by the Ethereum blockchain and was previously reported on by ETHNews. ING created the benchmark after "successfully completing the first test of a large oil trade using blockchain technology," by working together with global energy group Mercuria and French investment bank Société Génerale. The adoption of digitalized commodity trading has the potential to eliminate costly paperwork and bureaucratic processes that bog down the rate at which transactions can be completed.
Hamers said the deal "proves that the commodity trade finance sector, where processes are largely paper-based and labour intensive, can be digitalised."
ING wholesale banking PR officer Renée Schnitzler told ETHNews that ING became involved with the Enterprise Ethereum Alliance to "develop use cases" and "integrate with corporate/banking systems to achieve payments triggered by blockchain events" for Easy Trading Connect.
Time constraints and the intrinsic merits of the Ethereum blockchain also contributed to ING’s decision.
"Ethereum is a battle-tested blockchain platform with a Turing complete Virtual Machine that allows us to build the smart contracts we require for Easy Trade Connect," said Schnitzler. "Ethereum was the first platform of choice in [Easy Trading Connect] because it was meeting the use-case and both ING and Société Génerale had developed a first experiment in this technology."
Time will tell in what manner ING will move ahead as it continues to develop blockchain based commodity trades.