The freight industry has just seen its first transaction settled via cryptocurrency.
Reports in Bloomberg on Tuesday (Jan. 23) said a transaction between a top Russian wheat shipper and Turkey was completed in bitcoin. The deal was part of the pilot testing of the blockchain-based payment system developed by Prime Shipping Foundation, which provides the logistics and freight market with a way to process payments and convert those transactions in and out of cryptocurrencies.
The company, headed by Chief Executive Officer Ivan Vikulov, is the result of collaboration between Quorum Capital and Interchart. Prime Shipping Foundation is also reportedly exploring the development of its own digital currency.
“We are trying to develop a cross-border payment system that’s easier and faster than what’s available now,” said Vikulov in an interview with Bloomberg. “As far as we know, this is the first freight deal done in cryptocurrency.”
The transaction occurred as the global freight and logistics market explores the potential of blockchain and cryptocurrency to streamline transactions and the sharing of data across partners and throughout supply chains.
Prime Shipping Foundation is also seeking a banking license in Gibraltar, the firm told reporters, to facilitate transactions using government-issued cryptocurrencies. Further, the company also plans to raise funds sometime this year.
Reports noted food trading giant Louis Dreyfus also recently facilitated the industry’s first agricultural commodity trade using blockchain technology in a transaction involving the sale of soybeans from the U.S. to China’s Shandong Bohi Industry Co.
Last year, top players in the logistics industry joined together to form a consortium to explore the use of the distributed ledger technology. The group, headed by TKI Dinalog, aims to identify potential use cases for blockchain in areas like supply chain finance.
“If you ask me, using blockchain technology for the financial routes in logistics is just the beginning,” said the group’s Supply Chain Finance Program Manager Martijn Siebrand at the time. “I see this as a stepping stone toward a logistics sector with improved collaboration throughout the entire chain.”