Common in the financial industry, blockchain is a tamperproof digital ledger that records each player and action throughout a process, making transactions safe and trackable. The transparency inherent in the system also makes each entity involved more accountable.
The Seam, a commodities trading and agribusiness software provider, sees an application for this technology in cotton trading and tracking along the supply chain. The solution? IBM’s Hyperledger Fabric blockchain technology.
“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.”
Initially used for digital currency like bitcoin, blockchain is gaining in popularity in other industries. Last month, Walmart announced it would test blockchain as well, specifically in the Chinese pork and U.S. produce markets. Recently, the U.S. Food and Drug Administration said it may use the technology to help securely transfer patient data between sources like researchers and developers.
For such a system to work though, it needs to be widely adopted; the more entities involved, the more robust and useful the system becomes. Seam is relying on IBM’s reputation and connections to build a consortium that spans cotton producing and consuming regions.
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. In 2000, The Seam launched the first online, neutral trading exchange for cotton, and has since expanded into other industries.