Blockchain Arrives for Ship Finance

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By MarEx 2018-02-05 17:00:00

The blockchain revolution has already arrived for shipping, with big players like Maersk making moves on core business systems that rely on distributed ledgers. Now it is arriving for shipping finance. A new startup, Shipowner.io, intends to democratize investment in merchant vessels by offering a blockchain-based trading platform, and it says that it already has $200 million in listed assets and services.

The shipowner.io marketplace is based on Ethereum, a popular blockchain-enabled host platform for all kinds of trading applications. Ethereum logs contractual transactions like promissory notes, leases, futures or payment agreements using a secure, distributed digital ledger. It also allows users to create their own virtual tokens to represent assets, similar to stock certificates but secured and verified by blockchain. 

Using this tool, Shipowner.io will create 1.5 billion SHIP tokens, half of which will be released to the public at set prices. At present cryptocurrency trading rates, the first round of SHIP tokens will be offered at about $1.45 each. Using these tokens, investors will be able to buy into assets and services on Shipowner's marketplace platform. The demand for these tokens is not intended to be driven by speculation, but by the "user's interest in purchasing and trading participations in maritime assets" - like ships. 

Thanks to this "tokenization," small investors will be able to buy into the business of ship finance - a realm that has previously been accessible only to large organizations and well-financed individuals. Shipowners would benefit from more liquidity, better price transparency, lower costs and more secure transactions. If its platform takes off as it expects, Shipowner.io will "conservatively" have $14 billion in assets onboarded and "tokenized" by 2023, with annual transaction volumes of nearly $15 trillion. The ultimate goal is nothing less than "destroying the scourge of cronyism; taming an army of unnecessary intermediaries; [and] upstaging the inefficient allocation of capital."