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Agriculture giants team up on blockchain platform to track grains in Brazil

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The world’s largest grains and oilseeds companies, American giants Bunge and Cargill, have joined together to create the joint venture Covantis, which will use blockchain technology in the agricultural sector in Brazil.

The unprecedented project foresees the exchange of information between all members of Covantis, which also includes the participation of other agribusiness giants such as the French Louis Dreyfus Company (LDC), the Chinese state-owned company Cofco International and the Dutch multinational Glencore Agriculture.

Together the companies that make up Covantis move around 550 million tons of grains and oilseeds every year.

The goal of the partnership is to unify the sector’s data and facilitate communication between all participants, improving the logistics processes at the ports, among other things, all using blockchain. The official platform is expected to be launched next year.

Companies negotiate around 500 thousand contracts for purchase and sale each year in Brazil and the first tests for the platform were carried out at the Port of Santos between July and August this year and involved 11 companies, including trading companies, originators and grain producers. Covantis CEO Petya Sechanova said:

“Covantis should become the leader of operations in our sector and will be able to streamline processes, modernize and digitize them.”

According to the CEO, the choice of Brazil was due to the complexity of its market. Speaking to the Valor publication, Sechanova said the country saw “chain sales” or “string sales” taking place, in which dozens of intermediaries needed to act for the shipments to happen, even though only final buyers and senders have contact with the physical shipment.

Marcos Amorim is the director of the contracts committee of the National Association of Cereal Exporters (Anec), whose associated trading companies are actively working with Covantis. He said it’s a complicated and difficult process:

“Imagine that each shipment has both a purchase contract and a sales contract, that there are phytosanitary certificates attached to them and a series of other documents required by different countries. And that ships form lines and must have a certain loading rate. This greatly escalates the operation at the port and the delay at any end implies losses for the entire chain.”

Within the trading companies, the process generates a somewhat messy work flow, that is currently managed by email, phone and WhatsApp. Arrival and departure dates, ship flags and cargo volumes circulate non-stop, especially during peak seasons. But with mistakes happening daily, so too expenses and fines mount up.

But with Covantis all this information circulates using blockchain technology, which, according to its participants, helps the flow of information, prevents fraud and ensures the security of shared data.

Sechanova also says that Covantis’ ambition is to gradually bring together all the grains and oilseeds shipments in bulk from its founding companies in the world.

Argentina and the United States are the next countries in which Covantis plans to use its blockchain solution.



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In China, most blockchain R&D funds are going toward this segment

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A report published by Securities Daily explained how China’s publicly-listed companies spend the millions they have allocated toward blockchain R&D. The study surveyed 23 companies in China who began working with blockchain back in 2016. Figures suggest that companies allocate an average 20% of their annual revenues toward such purposes. The majority of these funds are spent to further government-related solutions.

The report highlighted that Yuanguang Software, an enterprise software provider, have increased their related research spending by around $24.3 million since 2016. Other companies, such as Xinchen Technology, have actively spent funds on blockchain-related government research projects in an effort to strengthen the nation’s financial sector.

Chen Xiaohua, the chairman of the China Mobile Communications Federation’s Blockchain Professional Committee, commented on how blockchain interest has grown amongst publicly-listed Chinese companies:

“Listed companies can use blockchain technology to improve their products on the one hand. Awareness and brand promotion, on the other hand, use blockchain technology to improve its own technological level, break the structural constraints of the traditional Internet model, and an in-depth layout of the digital economy.”

According to a report titled “2020 Blockchain Industry Development”, Chinese companies have applied for 4,435 blockchain patents — over half of all global blockchain patents. This surge in interest followed Chinese president Xi Jinping’s endorsement of the industry.



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An encryption study revealed a surprising fact about blockchain adoption in Mexico

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A report called “Encryption Trends in Mexico 2020/2021” surveyed a total of 353 representatives from companies throughout Mexico.

The study, published by privacy research center the Ponemon Institute, indicated that 40% of the Mexican companies surveyed were looking to adopt blockchain and cryptocurrencies in some form. Out of this segment, 71% were focused specifically on crypto usage.

The figures also showed that 51% of these companies were intent on implementing blockchain for asset management and transaction handling purposes, while 37% expressed an interest in the implementation of smart contracts. Many of these companies could ultimately use blockchain to improve their security systems and guarantee proper encryption processes, the study said.

Though Mexico is not often viewed as a major blockchain player on a global scale, the country has played an active and ongoing role in terms of adoption. In September, Mexico announced plans to enable a blockchain-based electronic voting system for certain citizens residing abroad. The county aims to make this available in time for its 2021 election cycle.

Cointelegraph Spanish reported in August that Mexican companies had raised over $1.3 billion in the fintech sector. Part of these funds went toward blockchain technology development within the country.



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With job listing, Canada’s central bank takes additional steps towards a CBDC

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The Bank of Canada is looking to hire an economist who has a deep knowledge of financial technology and digital currencies, potentially signaling the latest in a series of steps towards a Canadian Central Bank Digital Currency (CBDC). 

According to the bank’s official page, the economist’s duties will be to monitor and analyze the latest developments related to electronic funds and payments, implement research projects, prepare analytical notes, and work on the “potential development of a CBDC.”

The Bank has defined a set of requirements that the applicant must meet, among which are an in-depth knowledge of Bitcoin, Ethereum, and other major cryptocurrency platforms, as well as familiarity with traditional payments systems like card networks, merchant acquirers, and point of sale technologies. 

The applicant must also have experience in handling and analyzing public blockchain data and analyzing consumer survey data.

Oct. 25th, 2020 is the deadline for receiving applications.

The Deputy Governor of the Central Bank of Canada, Timothy Lane, has recently called on central banks worldwide to issue their own digital currencies, highlighting their importance for the economy in light of the Covid-19 pandemic. At the Central Bank Payments Conference Lane also said that Canada’s CBDC development was progressing at “a good pace.”

In laying the foundation for a CBDC, the Bank joins the Bank of England, the U.S. Federal Reserve and the Bank of Japan, among others, who have also begun conducting research into the viability of CBDCs. 



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