The Seam, a commodities trading and agribusiness software provider, today announced that it is forming a blockchain consortium for the global cotton industry. Working with IBM, the company intends to lead an industry-wide collaboration initiative to create a supply chain and trading ecosystem built on IBM blockchain technology, according to a press release issued today.
A blockchain is a secure, distributed and immutable digital ledger enabling companies to work together on a foundation of trust, increased speed and reduced interference. Combined with “smart contracts”, the technology has powerful implications for global trade with cross-border settlement and instantaneous transfer of currency or other assets when defined conditions are met.
“This new technology will be transformational for the cotton industry,” said Mark Pryor, Chairman and CEO of The Seam. “There are numerous organizations, processes, systems and transactions involved from field to fabric. Situated at the intersection of agriculture, finance and technology, The Seam, with the help of IBM, is uniquely positioned to introduce blockchain technology to cotton-affiliated businesses worldwide.”
The Seam has a successful history of innovation. According to the release, the company began operating the world’s first online, neutral trading exchange for cotton in 2000. Since then, tens of millions of bales have been traded and cleared on its platforms. In September 2016, The Seam launched a cloud-based commodity management system for the peanut industry, the first of its kind.
Blockchain technology encourages broad involvement with the benefits of a network effect, whereby a service becomes more valuable the more participation it has. IBM will play a key role in driving global adoption, with its digital footprint in all cotton producing and consuming regions.
“Blockchain offers enormous potential to drive innovation throughout the cotton industry,” said Arvind Krishna, Senior Vice President, IBM Research. “A consortium approach using IBM Blockchain and the Hyperledger Fabric can help create greater efficiency and serve as the foundation of a robust system for massive collaboration.”
The ownership group of The Seam includes renowned cotton leaders Calcot, Cargill, ECOM Agroindustrial Corporation Ltd., EWR, Inc., Louis Dreyfus Company, Olam International, Parkdale Mills, Plains Cotton Cooperative Association and Staple Cotton Cooperative Association.