The global shipping industry could see substantial benefits in using bitcoin as a Ukrainian shipper negotiates its first bitcoin transaction.
Varamar Ltd., a shipping company based in Odessa, a port city in southern Ukraine, will be among the first shipping operators to accept payments in bitcoin. According to Bloomberg, the shipper is currently negotiating its first transaction in bitcoin with a client and will accept the cryptocurrency going forward.
One of the world’s oldest industries, the shipping sector is known to be notoriously lazy to adopt new technologies. However, bitcoin solves a critical process that has routinely plagued the modern shipping industry – payments. Specifically, the world’s first and most prominent cryptocurrency will enable shipping operators to transact with customers in countries clamped down by global sanctions that affect traditional payments through banks.
Varamar’s founder Alexander Varvarenko told Bloomberg:
Paperwork for transactions is a complicated issue with banks, and bitcoin payments will help solve that by being faster. It could also help solve payment problems in countries like Pakistan, Russia, Sudan, Yemen, and Qatar, which have safe companies but are victims of sanctions being imposed against their governments.
Other industry firms are catching on too. Russian chartering and shipping broker Interchart Shipping Inc., is reportedly working on establishing payment rails through bitcoin since some of its customers are effectively cut off from transacting in dollars via banks. One of the firm’s partners, a Gibraltar-based grain trader Quorum Capital is keen on the “new way of payments” while admitting there was still homework to be done.
“The industry has been under stress as [the] majority of vessels are registered offshore and many vessel owners have banks in the Baltics,” said Quorum Capital’s managing partner Ivan Vikoulov, “where there is a squeeze to send and receive payments in dollars.”
The shipping industry is already investing heavily in blockchain-powered commerce wherein several pilot projects all over the world have already trialed entire trade finance and supply chain transactions over a blockchain. By adopting bitcoin as a payment method alongside the implementation of the blockchain, the global shipping industry would see significant gains in efficiency and income with decentralized technologies.