Today a new standards association has been launched targeting digitization in the agricultural commodities sector. The Global Commodity Technology Association (GCTA) aims to improve trade processes and standardize post-trade execution. Its backers believe that blockchain is on the cards, but first, the data needs to be standardized.
There’s already an agribusiness digitization project that was initiated by Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus. Subsequently, COFCO and Glencore Agriculture joined. So how does the GCTA differ? According to the new association, its focus is on standards or harmonizing procedures. It won’t be producing any technology, unlike the six-member group.
The founding managing director of GCTA is David Lehman, who was Managing Director of R&D at the CME Group. Prior to that, he was Chief Economist at the Chicago Board of Trade (CBOT) before its acquisition by CME.
PanXchange is the GCTA’s first member. The company is a physical OTC marketplace for a variety of commodities including industrial hemp, frac sand and East African commodities.
“Major commodity sector players have shown keen interest in the GCTA’s mission, so now it is time to confirm intent with action by joining the association we’re creating to propel the industry forward,” said Lehman.
To encourage members to join, the organization will put initial membership dues in escrow until a quorum of ten top-tier participants has signed up. The group is initially targeting major agribusiness trading houses and freight forwarders.
PanXchange’s founder and CEO Julie Lerner commented that “The GCTA’s success will be marked by (this) harmonization — one document and one procedure at a time — which is prerequisite for the rollout of any distributed ledger technology.” She believes that the current state of documentation is not yet suitable for blockchain.
Commodities blockchain projects:
|Agribusiness||ABCCD: ADM, Bunge, Cargill, COFCO, Dreyfus, Glencore|
|Sugar||Al Khaleej Sugar|
|Cobalt||IBM, Ford +|