This post is also available in: Español
Former JPMorgan executive Blythe Masters predicts that “tens, if not hundreds” of blockchain projects will soon come to commodity markets, Bloomberg reported on October 9, 2018.
Blockchain Tech Will Solve the Problem of Complex, Inefficient Supply Chains
Blythe Masters, CEO of Digital Asset Holdings
Blockchain technology could come to commodity markets sooner than expected, former JPMorgan executive Blythe Masters told guests at the London Metal Exchange annual dinner on October 8.
The virtual ledger technology underlying cryptocurrencies such as Bitcoin promises greater confidentiality, fewer paper exchanges, better provenance and a boost in productivity, Masters said according to Bloomberg.
Masters, who made managing director at JPMorgan at 28, the youngest woman to achieve that status in the firm’s history, went on to become head of global commodities and is credited with developing the company’s credit-default swap. Masters is currently the CEO of a New York-based tech startup called Digital Asset Holdings and believes that blockchain is the best way to modernize supply chains.
“Supply chains are notoriously complex and inefficient,” Masters said according to Bloomberg. “This is especially true in the metals and mining industry where many operational and commercial practices remain inefficient and antiquated, leading to critical data omissions, security vulnerabilities, expenses, corruption, and unethical provenance.”
Blockchain technology had only recently started finding its way in the commodities market, Bloomberg reported, where it’s now seen as the most efficient way to track material through supply chains in gold, diamonds, and oil.
Mainstream financial institutions have already started looking into blockchain to reduce the risk of multiple-invoice fraud. Standard Chartered Plc, which was the center of a scandal involving forged commodity-storage receipts back in 2017, is reportedly actively looking into implementing blockchain.
Not Everyone Shares the Optimism
During her October 8 speech, Masters noted that the technology looks set to benefit legacy structures by simplifying bureaucracy, increasing confidentially, and boosting productivity. Masters’ Digital Asset Holdings is also designing software to aid the sector in blockchain implementation, she said at the LME event, involving banks and investors among other participants trading bonds and assets.
However, not everyone shares the opinion that blockchain tech is ready for mainstream implementation. Tradeshift CEO, Christian Lanng, told CNBC on September 19 that blockchain technology is still not mature enough to fully support the global supply chain. Lanng said that blockchain isn’t a high-performance technology, adding that it’s also too expensive to be scaled on a global level.
According to Bloomberg, previous speakers at LME have used the opportunity to rail against the encroachment of technology into the LME, where prices are still set via an open-outcry trading ring.