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The komgo blockchain platform for commodity trade finance has released two new products, with more functionalities scheduled to go live next month.

The platform now facilitates standby letters of credit and receivables discounting, in addition to the existing letter of credit (LC) product and KYC module.

komgo, which went live in December, aims to digitise and streamline commodity trade finance. Founded as an independent venture in August 2018, its 15 shareholders include a mix of corporate and financial players: ABN Amro, BNP Paribas, Citi, Crédit Agricole, Gunvor, ING, Koch Supply & Trading, Macquarie, Mercuria, MUFG Bank, Natixis, Rabobank, Shell, SGS and Société Générale.

Its establishment followed two experiments carried out on ING’s Easy Trading Connect platform in energy and soft commodities trading in 2017 and early 2018 respectively.

The hope is that, by leveraging blockchain technology, komgo will change the way financiers transact with clients and other parties in the ecosystem, significantly speeding up the time it takes to process a deal, while also enabling parties to easily monitor an operation’s progress in real time.

With the new releases on the platform, companies can now get quotes from their banks on the three financing products, while banks can approve financing or issue an LC or standby LC. Furthermore, users can request and submit digital trade data and documents.

The new features have been welcomed by users, explains Baptiste Audren, head of products and business development at komgo.

“We released the new iterations last Friday (June 14),” he says. “Before that there was only the letter of credit and it was a really rigid letter of credit, so we had limited usage. But since Friday we have had standby letters of credit opened every day, so usage is picking up.”

komgo is already planning for the next release, which will come out in July, Audren explains. “The next iteration will include a bit more. You will be able to also get a quote for banking confirmation lines and to finalise pricing by binding a quote on the platform. We also have iterations on the KYC module, which is getting much more advanced, so you can do automatic requests,” he says.

The July release will also integrate a verification feature, which will enable users to verify any document on the blockchain. This will help the industry mitigate the risk of fake documents and fraud.

According to Souleïma Baddi, komgo’s CEO, the plan is to release komgo 1.0 by the end of the year. “Our intention is to have the basic toolkit to do trade and commodity finance, which is LCs, standby LCs, receivables discounting, inventory financing and credit insurance, and for all kinds of goods, energy, metals and soft commodities,” she says.

Today the platform only covers the BFOET market, which includes five North Sea crude oil fields (Brent, Forties, Oseberg, Ekofisk and Troll).

In terms of users, komgo has onboarded its 15 shareholders, who are now in production with the solution.

The next step is to sign up non-shareholder members. Baddi says komgo has already undergone demonstration, testing and training sessions with new companies and banks, which it will start onboarding in July.

“We have an important pipeline,” she says. “Our challenge is mainly how we prioritise the onboarding to create the most efficiency for current users. We are giving priority to the counterparties that are going to draw traction to the platform, either with existing users or because they are going to push massive volumes on it.”

While Baddi didn’t name any of the new players, she says Asia is a big focus region for komgo, and that it will be opening an office in Singapore by the end of the year.