MUFG Bank has successfully executed its first live digital transaction on komgo, a blockchain based commodity trade finance platform led by KomGo SA*.
KomGo SA is a new venture formed in August 2018 by MUFG Bank and fourteen other top global institutions, including commodity trading and corporate companies, seeking to digitalize the commodity trade finance sector through a blockchain based open platform.
KomGo SA has developed a secure platform that is part of an emerging global ecosystem aiming to optimize commodities trading and commodity trade finance operations. komgo offers various digital trade finance products including letters of credit, standby letters of credit and receivables discounting, allowing commodity traders or other corporates to submit digital trade data and documents to banks of their choice. In addition, komgo offers a KYC module which standardizes and facilitates the KYC process without using a central database, where the exchange of documents is executed with encryption over the blockchain on a need to know basis.
The commodity trade and trade finance industry has been notoriously governed by paper based manual processes. KomGo SA's innovative blockchain platform will allow increased speed through paperless operations, efficiency through digitalization, fraud reduction through data privacy and immutability, and security through encrypted technology.
As KomGo SA's sole Asian shareholder, MUFG Bank, alongside the other global shareholders, are utilizing the platform to promote digitalization within the commodity trade finance industry. MUFG's first letter of credit was executed in London on komgo's platform for Mercuria Energy Trading SA, a commodity trading company.
Jean-Marie Le Fouest, Managing Director, Head of Commodity and Structured Trade Finance EMEA at MUFG said:
"We believe KomGo SA's fully digitalized open financing platform, powered by blockchain technology, will dramatically improve the efficiency and transparency of the industry.
"MUFG is proud to be a pioneer in the digitalization of the commodity trade finance sector, and we look forward to continuing our support of komgo's development around the world."
* The founders of this new company, managed and operated as an independent entity, include companies from: MUFG Bank, ABN AMRO, BNP Paribas, Citi, Crédit Agricole Group, Gunvor, ING, Koch Supply & Trading, Macquarie, Mercuria, Natixis, Rabobank, Shell, SGS and Société Générale.