Cryptocurrencies are slowly becoming mainstream when it comes to settlement for all kinds of goods and services. Just recently the first known freight consignment was settled in bitcoin as the deal consisted of 3,000 tons of wheat from Rostov that was sent to Turkey.
Bitcoin Used In the Freight Industry
Last month bitcoin was used in a freight deal sent from Russia to Turkey, according to a firm called Prime Shipping Foundation (PSF). The settlement was part of a pilot the company is testing that features blockchain-powered settlements for large commodity consignments. PSF’s founder and CEO Ivan Vikulov hopes the company’s trial can lead to processing freight deals more fluidly by using cryptocurrencies. During the research and development of the project, PSF has partnered with Quorum Capital Ltd, and a ship management service called Interchart LLC.
“We are trying to develop a cross-border payment system that’s easier and faster than what’s available now,” explains Vikulov in a recent interview.
As far as we know, this is the first freight deal done in a cryptocurrency.
Switching Away from the Classical Banking System
The ship carried PSF’s 3,000 metric tons of wheat from the Russian region of Rostov to Samsun, Turkey. The freight deal made in cryptocurrency shows that these types of payments could bypass international sanctions in those areas. According to Vikulov, his firm is planning to get licensed in Gibraltar because the country has been more favorable towards cryptocurrency solutions.
“Most of the world’s tonnage is currently registered offshore — The flexibility of these jurisdictions creates a good foundation for the development and the potential switch away from the classical banking system towards a much simpler payment system,” Vikulov details.
Other Projects Using Bitcoin to Disrupt the Global Freight Industry
There are also other projects trying to tether bitcoin settlements with the freight industry. Another project called Blockfreightuses both the bitcoin (the Counterparty system) and ethereum blockchain while also utilizing the IPFS (Inter-Planetary File System) protocol within the global supply chain. Julian Smith, Blockfreight’s Co-founder and CEO told news.Bitcoin.com at the Texas Bitcoin Conference that he sees bitcoin becoming the underlying settlement in the trillion dollar freight businesses. In fact, Smith believes supply chain dealers won’t even know bitcoin will be running beneath the system.
3,000 tons of wheat settled in bitcoin maybe boring compared to the swathe of luxury home purchases and Lamborghinis bought this year, but organizations involved with the supply chain believe the recent deal is a milestone.