Analysis News

Oil and gas blockchain plus blockchain for government bonds

Blockchain is used now in areas where there’s a lot of money and where the commercial and state bureaucrats had ruled before. It’s about the supply chains of oil and gas, and even the sale of government bonds.

Where the money is

There is nothing surprising in the fact that blockchain developers aspire to where big money is. Surprisingly, taht so far no one has guessed to open up the blockchain opportunities to oil traders. That must be why the first project got the attention of Saudi and Norwegian investors right away. Data Gumbo Corp. develops “commercial Internet”:

– Just as web browsers turned TCP/IP into the internet, Data Gumbo Blockchain creates the commercial internet. Rather than websites connected with links, we connect companies with smart contracts.

This was estimated at $ 6M of investment by Saudi Aramco and Equinor, the Norwegian energy operator. With new investments, Data Gumbo financing is $ 9.3 M.

Data Gumbo attracts investors by offering the blockchain-as-a-service (BaaS) concept. Thus, the startup promises, in exchange for millions of investments, to eliminate billions in losses in the supply chains of petroleum products due to the delay in payment and the time for signing contracts. Data Gumbo promises to “connect companies to smart contracts,” which means guaranteeing the exact fulfillment of conditions, eliminating the human factor, and removing costly controls. The company declares:

– Transparency between companies and suppliers, made possible with blockchain technology, will eliminate waste and drive higher margins for all parties.

Earlier, the idea to use the blockchain in the supply chain was addressed by Russian Prime Minister Dmitry Medvedev, who, as you know, is a fan of information technology. In his opinion, blockchain could significantly improve the supply of Russian gas, on which there are many issues in connection with the transit through the territory of Ukraine and Belarus.

In America, the potential of blockchain for oil and gas supplies was also estimated. Seven companies – Chevron, ConocoPhillips, Equinor, ExxonMobil, Hess, Pioneer Natural Resources and Repsol – formed the Oil & Gas Blockchain Consortium in late February to study the issue. Oil and gas traders hope, not without reason, that the blockchain will increase the transparency of supply and reduce risks.

Government bonds for all

Belarusian crypto-exchange Currency.com also promises transparency and minimal risks – but already in the field of investment. Exchange trades tokenized assets. This is an analogue of traditional bonds in the form of a token, that is, entries in the blockchain. The exchange sells them for bitcoins and ethers, as well as for fiat dollars, euros and rubles. Tokenized assets are tied to the base market value of traditional assets. The exchange informs that the trade is so successful that now is time to add state bonds of the Republic of Belarus. When the exchange was launched at the beginning of 2019, Belarusian Ministry of Finance categorically denied the very possibility of such trading. But this possibility has appeared now, after President Lukashenko has approved Currency.com activity.

True, the Ministry of Finance does not make special issues of government bonds for Currency.com. The exchange buys them at the Belarusian Currency and Stock Exchange. One token costs $ 1000 – the same price as the Belarusian government bond. But users can buy a part of the token – so even small investors can lend to the Belarusian state. The yield is 4.2% at a rate on foreign currency deposits of 2-3%. High yield on bonds is explained by high country risks.

Founder of Currency.com, a big IT businessman Viktor Prokopenia, emphasizes that government bonds are an elite asset class that was previously inaccessible to private investors. V. Prokopenya notes:

– Blockchain is used to democratize global financial markets, and Currency.com spearheads this paradigm shift.

Blockchain does have an increasing impact on traditional markets. And cryptoindustry grows with it.

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