A Reality Check for Blockchain in Commodity Trading
Report

A Reality Check for Blockchain in Commodity Trading


Rating

8

Recommendation

Blockchain, the technology of the distributed ledger, continues to make inroads into numerous industries, especially the financial services sector. But as with any new innovation, blockchain presents both rewards and risks: Too many early adopters get swept up in the enthusiasm and focus solely on the benefits. Boston Consulting Group professionals Antti Belt and Steven Kok cut through the hype to examine blockchain’s pros and cons in the commodities trading business. Financial executives will find this a compelling and thought-provoking analysis.

Summary

Blockchain enables users to conduct business through distributed ledgers in an environment in which transactions are immutable and no central clearinghouse governs. Many commodity professionals are seizing on the technology as a means to create greater efficiencies in contract execution, deliver improved transparency, and promote enhanced coordination and standardization. However, stakeholders’ excitement about the seeming wealth of opportunity in blockchain may not fully take into account its pitfalls.

One major obstacle is that commodity markets are not homogeneous: Oil, gas...

About the Authors

Antti Belt and Steven Kok are Boston Consulting Group professionals.


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