Automotive firm teams up with Germany's largest state-backed wholesale bank group in financial transaction test
Daimler says it has carried out a successful €100 million (A$148 million) financial transaction using blockchain technology.
The pilot program, which ran in association with Germany’s largest state-backed wholesale banks group Landesbank Baden-Württemberg (LBBW), included issuing a one-year corporate bond to LBBW.
The test, which also included a trio of savings banks based in Esslingen-Nürtingen, Ludwigsburg and Ostalb, respectively, simulated lenders within the prototype system.
The entire transaction cycle – from origination, distribution, allocation and execution of the loan agreement, to the confirmation of repayment and of interest payments – was automated digitally through the blockchain network, Daimler states.
Both Daimler and LBBW adopted blockchain’s cryptographic signature technology to prevent manipulation of transactions.
The automotive company joined the blockchain project experiment as part of its broader plan to explore possible uses of this technology.
Bodo Uebber, Daimler AG board member responsible for its finance and controlling and Daimler Financial Services divisions, says the pilot is the company’s first step in testing the various uses of blockchain technology and assessing its potential for future transactions and financial processes.
“Simultaneously with launching the Schuldschein, we conduct other projects to determine where blockchains could also be used to increase efficiency and support our business models,” Uebber says.
Daimler and LBBW are now looking at other applications, including the issuance of syndicated loans by way of blockchain’s distributed ledger technology.