Blockchain innovator and former JPMorgan head of commodities Blythe Masters spoke at the London Metal Exchange annual dinner during the LME Week to say that blockchain is coming to commodity markets to introduce heightened confidentiality, reduce paper waste, and improve provenance and productivity.
Masters — who became managing director at JPMorgan at the age of 28 before becoming the head of global commodities — is not without her share of controversy in the financial space. She’s widely credited with creating a credit derivative vehicle known as the credit default swap, which has been identified as one of several investment vehicles responsible for the global economic crash of 2008. Her creation has been described in the media as a financial weapon of mass destruction.
However, there’s no denying that Masters is an expert in the field of finance and commodities, and with her new role as CEO of Digital Asset Holdings, which develops blockchain solutions for financial services, there are few people better qualified to speak on the application and adoption of blockchain in the commodities industry.
“Supply chains are notoriously complex and inefficient,” Masters said during her London speech. “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 has a potentially revolutionary role to play in future supply chain tracking of goods in all industries from food and clothing to commodities like gold, diamonds, oil, and more, Masters reminded 2,000 investors, brokers, metal producers, and buyers of this at the LME dinner, highlighting the potential use cases of mining, shipping, and trading of metals.
“Blockchain facilitates the exchange of critical trade documents, bills of lading, letters of credit between connected users securely and confidentially,” she said. “Clearly the indications for metals mining, shipping, storage, and logistics industries are nontrivial.”
Many projects are already underway in the sector with Swiss commodities giant Mercuria testing blockchain as a method of supply chain tracking for crude oil. Mercuria is one of the world’s largest traders of commodities, and the CEO has stated that blockchain could slash oil industry costs by up to 30 percent. Meanwhile, Agora Commodities has partnered with DigitalTangible, the world’s first bitcoin precious metals trading platform, to allow investors and traders to buy and sell tokenized metals with verifiable tokens on the blockchain.
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