Even though deregulation of Australia’s wheat market has provided growers with many benefits, it has also left them facing insolvencies or problems with payments. With this problem costing wheat growers in Australia hundreds of millions of dollars each year, a blockchain solution was needed.
Enter Australian-based AgriDigital, an integrated commodity management solution for the global grains industry that utilizes the Ethereum blockchain to ensure transparency and efficiency, thus bringing back trust between farmers within the ecosystem.
Developing solutions to real world problems in the sector, AgriDigital launched its pilot last December. Executing the world’s first settlement of an agricultural commodity on a blockchain this enabled real-time payment on title transfers for Australian grain growers. Real-time payment has major benefits for the industry as it removes the counterparty risk that sellers face.
Speaking to CCN, Emma Weston, co-founder and CEO of AgriDigital, said that since the launch of the platform it has been a huge success, illustrating that the blockchain offers a practical solution for agriculture. Furthermore, Weston says that there has been an overwhelming amount of support in utilizing the blockchain-enabled platform to secure transactions across a range of agri-supply chains, which will see further pilots later this year.
We are also investing in using blockchain and distributed ledger technologies to build out an entire digital agriculture supply chain with key industry participants. Doing this will provide valuable provenance data and offers participants savings in reducing transaction costs, risk and fraud.
Focused on building on the presence of AgriDigital within the Australian grains market, the team’s commodity management solution is now in market with two of Australia’s biggest grain buyers and exporters on board as their first customers.
Keen to maximize on the positive impact AgriDigital is providing, this year they intend to expand on its platform, enabling it for cross-commodity and cross-geography. Recently launching cottonseed with plans to include livestock later this year, it is now possible for Australian customers to contract with international customers and utilize the AgriDigital platform to deliver to an international port.
Yet, while they will continue to carry out blockchain pilots focused on the transactional and provenance space in the country’s agriculture industry, Weston states the team will be working on bringing supply chain finance to its platform in 2017 too.
We are carrying out a number of pilots with a number of industry participants in Australia, using IoT devices and integrations to reduce risk, improve visibility for banks over the assets they own and provide easy access to finance for grain buyers.
Australian FinTech Rivals the UK
Recently, AgriDigital was one of seven Australian fintechs that took part in the British Australian FinTech Forum hosted by the British Australian Chamber of Commerce in London. Participating in the blockchain panel on its opening day, key issues that were addressed within the space included payments, identity, RegTech, blockchain, cybersecurity and partnership with banks and other financial institutions.
Of course, while the U.K. is considered the global fintech hub of the world, Australia is quickly becoming recognized as a global leader within the blockchain community.
In March, Standards Australia unveiled its roadmap report on how it was going to spearhead developments in international blockchain standards to support the privacy, security and interoperability of blockchain systems.
In the same month, Australia Post announced its partnership with Alibaba, the world’s largest e-commerce store and Blackmores, a prominent Australian natural health company, to explore the blockchain to stop the risk of counterfeit food sold in China.
Solar-powered energy in Australia also saw a first after it was reported that apartment owners in the suburb of Fremantle, Western Australia, were among the first in the country to trade solar power over a blockchain.
However, while Australia may be leading the way in the blockchain space with enterprises they are fortunate to have on their doorstep, Weston says that the U.K. is investing an ‘enormous amount of economic and legislative power in setting up the right infrastructure’ that aims to support blockchain development, attracting fintechs from other countries.
This is something we could learn from in Australia, particularly in regards to supporting innovation and competition through open data, and initiatives like the new limited banking licenses.
These include U.K.-based challenger banks Monzo and Starling Bank, which are, in essence, mobile applications with banking licenses. Equipped with the authority to function under limited banking licenses they provide competition to traditional banking services and an alternative banking model.
Blockchain and the Future of Supply Chains
With the founders of AgriDigital equipped with over 80 years’ experience in the Australian grains industry, it’s natural that the team’s market strategy involves targeting that industry; however, as the platform is designed to be cross-commodity and cross-geography, multiple participants who face similar challenges to accessing finance who require a platform to create contracts and transact with different individuals can do so with AgriDigital.
Being blockchain-enabled and future proofed for IoT integrations means our platform also holds potential to provide many unique solutions in the future in areas like non-traditional financing, traceability and data sharing.
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