Hong Kong-based blockchain technology company 300cubits suspended the operation of the Booking Deposit Module from October 1st including the circulation of its tokens named TEUs. The container shipping cryptocurrency was established in 2017 with the intention of solving what it described as container shipping’s “booking shortfall” which it said was caused by 5m teu of ‘no show’ and ‘rolled’ cargo every year. It said that this cost the industry $23bn a year.
By introducing a booking deposit in the form of the teu token, a cryptocurrency based on the Ethereum blockchain network, 300cubits hoped to help eliminate this, which it said was a trust issue.
The system started accepting trial shipments in March 2018 and was launched into live production in July 2018. 300cubits was one of the first tech companies to apply blockchain technologies in shipping. The TEU tokens created by 300cubits remain one of the more recognized digital assets in maritime space.
However, the volume of transactions through the system failed to reach a commercial level. Only 200 or so containers went through the system, sufficient as a proof of concept, but not enough to be a viable business.
The biggest hurdle for 300cubits appeared to be not one of its making, but rather a lack of clarity in regulatory regimes surrounding digital currencies. This apparently put off many potential users, because they did not know what regulatory measures the relevant authorities might take.
300cubits also admitted that shippers faced bigger booking pain points than rolling, which was what the system is designed to solve. Shippers complained that they often could not get their bookings confirmed during peak season.
A lack of liquidity for the TEU tokens and the volatility of all cryptocurrencies in general were also hurdles that 300cubits could not quite overcome.
300cubits will burn at least 75% of the TEU tokens that have not been sold or picked up by the industry users. It will burn more TEU tokens as the ones currently being allocated to industry users circulate back to 300cubits.
The company said that “the positives are that the system has had participation from the largest shipping liners e.g Sealand of Maersk Group, CMA CGM, MSC and Cosco, while the 300cubits have gone the length in its discussions with the rest of the top 10 container liners about running trial shipments on the system. More than a dozen shippers e.g. Li&Fung Logistics, BASF, JF Hillebrand, Esprit, Mitsui Chemical, REWE etc have tried the system. 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 while many more shippers have contacted 300cubits and showed interests in 300cubits’ solutions.”
He company also admitted that “many blockchain features, like immutability, anonymity and avoidance of double sending, that make perfect sense for people interested in cryptocurrencies, are not particularly intuitive or appealing to most businesspeople.”