Blockchain booking deposit system suspended

Starting from 1st October, Hong Kong-based blockchain technology firm 300cubits has decided to suspend the operation of the Booking Deposit Module, claiming lack of clarity in regulatory regimes surrounding digital currencies.

The company announced successful completion of the first trial shipment in March 2018, consisting of two 40-foot high cube container boxes going from Malaysia to Brazil.

The system was launched into live production in July 2018 with participation from major shipping liners, as Sealand of Maersk Group, CMA CGM, MSC and COSCO.

In addition to those who have actually used the system, over 100 shippers have registered in the System to get their allocation of TEU tokens, the so-called “bitcoin of the shipping industry”.

However, the transaction volume through the system has been far from commercial, the company explained in a statement yesterday.

Only a couple hundred containers have gone through the System, which, although may seems plenty among the shipping blockchain projects, is not sufficient to keep the System going commercially. The lack of clarity in regulatory regimes surrounding digital currencies has proved to be the greatest hurdle in the 300cubits’ marketing efforts. Many potential users simply shied away from trying, being not sure about what regulatory measures the authorities may take.

Moreover, 300cubits has learnt that shippers face bigger booking pain point than rolling, which is what the system is designed to solve.

Instead, these shippers complain that they often could not get their bookings confirmed during peak season despite their booking volume are still within contract commitment.

Moreover, the lack of liquidity for the TEU tokens and the volatilty of all cryptocurrencies in general also cast a constant doubt among the users on whether the value of the tokens could be realized.

From 300cubits’ experience, many of the core blockchain features e.g. immutability and anonymity are either not intuitive or unappealing to the business users. And blockchain systems almost have to work interoperatably with central server based systems in the commercial applications. After all, business users are comfortable with the server based systems.

With the System being suspended, 300cubits will burn at least 75% of the TEU tokens that have not been sold or picked up by the industry users.

Going forward, 300cubits will burn even more TEU tokens as the ones currently being allocated to industry users circulate back to 300cubits.

In recent years, the internet of money, has been officially “welcomed onboard”, with Maersk, Hapag Lloyd, Evergreen, CMA CGM and Zim agreements explaining how blockchain technology would disrupt shipping.