The global shipping industry is one of the oldest in the world and a trillion-dollar business. In fact nearly all goods, which we buy have likely been shipped before via the world waterways. Like many other industries, the shipping business is facing systemic issues which could not be fully resolved before. Blockchain technology has now created a strong foundation to address and correct payment-related inefficiencies of the shipping industry.

The Prime Shipping Foundation was formed as an open-source project by Gibraltar-based Quorum Capital Ltd and shipping broker Interchart LLC in pursuit of disrupting the way payments are handled. The team, was working discreetly on the mechanics of the product, which will enable an immediate processing of payments and conversion from fiat to cryptocurrencies and back without incurring much additional cost for the customers.

The big picture

As the shipping industry is mostly using the United States dollar for freight payment and bunkering services, the Prime team developed a complex ecosystem to allow rapid and near-lossless transactions between major fiat currencies—meaning, government-issued legal tender—and major cryptocurrencies.

At the heart of the ecosystem lays the PRIME Token. By utilizing the Prime ecosystem freight market participants such as shipowners, charterers, freight operators, brokers, agents and bunker suppliers can increase the efficiency of their operations, simultaneously substantially cutting operating expenditures.

Prime is currently working with financial institutions to close the gap between fiat currency and cryptocurrencies. In pursuit of further strengthening its future position as a “handler of cryptoassets”, Prime Shipping Foundation has initiated the procedure to file documents for their banking license in Gibraltar, one of the most crypto-friendly jurisdictions.

“The Prime Crypto Bank will become the interface between the online world and the real world, allowing a gradual adoption for the shipping industry, without compromising the benefits the new era brings.”, Ivan Vikulov, CEO of the Prime Shipping Foundation said.

Product development and pilot testing

The Prime Shipping Foundation started testing their feasibility of the projected ecosystem in late 2017. Prime has cooperated with close shipowners to optimize the cash-flow cycle. On December 1, 2017, the foundation became the first organization to invoice freight in cryptocurrency for 3,000 tons of Russian wheat from Rostov-on-Don, Russia to Samsun, Turkey.

Why is the shipping industry more likely to switch to the new payment system? Most of worlds’ tonnage is currently registered offshore. The flexibility of these jurisdictions creates a good foundation for the development and the potential switch away from the classical banking system towards a much simpler payment system.