A commodities trading and agribusiness software provider, The Seam, has teamed up with IBM to establish a cotton blockchain consortium for the global cotton industry. With the partnership, The Seam intends to create a supply chain and trading environment based on the distributed ledger technology using the Hyperledger Fabric.
Mark Pryor, Chairman and CEO of The Seam, commented: “This new technology [blockchain] will be transformational for the cotton industry. There are numerous organizations, processes, systems and transactions involved from the field to fabric. Situated at the intersection of agriculture, finance, and technology, The Seam with the help of IBM, is uniquely positioned to introduce blockchain technology to cotton-affiliated businesses worldwide.”
The Seam’s ownership group consists of such cotton leaders as Cargill, ECOM Agroindustrial Corporation Ltd., Calcot, EWR, Inc., Louis Dreyfus Company, Parkdale Mills, Plains Cotton, Olam International.
“Blockchain offers enormous potential to drive innovation throughout the cotton industry,” stated Arvind Krishna, Senior Vice President at IBM Research. “A consortium approach using IBM Blockchain and the Hyperledger Fabric can help create greater efficiency and serve as the foundation of a robust system for massive collaboration.”
The Seam was launched back in 2000 as the globe’s first online exchange for cotton trading. Later, the company expanded its platform by adding other commodities like peanuts. To date, it has already processed more than $5 billion in commodities via its systems.
Agricultural businesses are increasingly investigating the possible use cases of the blockchain technology, which is expected to be one of the brightest trends to develop in 2017, according to a recent report from Greenwich Associates. The potential of blockchain is spreading beyond the financial sector, although the applications of the technology are mainly used within the payments industry.
Blockchain can be used by agricultural companies to reduce risks, eliminate inefficiencies and increase transparency in the supply chain. Last year, Wells Fargo partnered with Commonwealth Bank of Australia (CBA) to use the technology for shipping cotton from the US to China. The transaction of cotton became the world’s first cross-border trade between banks that was realized using the distributed ledger.
Bitfury Group has recently announced that it will soon form the Global Blockchain Business Council aimed at educating business leaders about the technology. The launch of the group is of crucial importance for further development of the technology, as it will provide a much-needed forum for connecting developers and innovators.
Meantime, Hyperledger project, which is targeted at providing blockchain solutions for various business aims, is going to begin testing the technology in production environments this year. A few days ago, the company exceeded 100 members by welcoming eight new companies.