Energy companies BP and Royal Dutch Shell have announced they will join forces to create a blockchain energy trading platform.
The announcement confirms long-running speculation blockchain could play a major part in the future of the industry, as firms including BP ran their own trials with the technology.
A consortium has been assembled, led by the two energy giants and joined by Norway's Statoil, trading houses Gunvor, Koch Supply & Trading, and Mercuria, and banks ABN Amro, ING and Societe Generale.
“I am very excited about this initiative,” said Anthony van Vliet, ING’s global head of trade and commodity finance.
“Marquee brands and competitors in the energy, trade and banking industry sharing one vision gives us a great opportunity to transform processing in the energy trade commodity sector.”
It is hoped the initiative will reduce the cost of trading and move the industry away from "cumbersome" aspects of transactions such as paper contracts. Blockchain technology depends on a shared database which would eradicate the need for independent verification.
In a statement, the consortium expressed a desire to see this form of trading replace traditional methods: "Over time, the new venture intends to lead the migration of all forms of energy transaction data to the blockchain, improving data quality, further strengthening security and increasing the speed of settlements industry-wide, while reducing the cost for industry participants."