The blockchain is coming to commodity markets, Blythe Masters told guests at the London Metal Exchange annual dinner during LME Week in London.
The technology underlying bitcoin promises greater confidentiality, fewer paper exchanges, better provenance and a boost in productivity, she said during her keynote speech at the event.
Masters who made managing director at JPMorgan Chase & Co. at 28, headed commodities and helped develop the credit-default swap and bring to life a market that peaked at $58 trillion, then became CEO of Digital Asset Holdings. She says her firm is designing software that will enable banks, investors, and other market players to use blockchain technology to change the way they trade bonds and other assets.
“Supply chains are notoriously complex and inefficient,” Masters said, adding that had implications for markets from mining through shipping to trading. There are “tens if not hundreds” of blockchain projects under way to address this.
Blockchain technology is finding a welcoming home in commodity markets, where it could be used to track material through supply chains in gold, diamonds and oil. Banks including Standard Chartered Plc, which was ensnared by a scandal involving forged commodity-storage receipts, have said they’re looking at the technology to address the risk of multiple-invoice fraud.
Masters addressed about 2,000 metals producers, buyers, brokers and investors at the LME dinner — a key event during LME Week in London. Some grandees of the industry have previously used the guest speech to rail against the encroachment of technology into the LME market, where prices are still set via an open-outcry trading ring.