Bitcoin, Blockchain & Cryptocurrency News

Siemens, Commerzbank and Continental Complete Successful Blockchain Pilot

A pilot for a money market security was recently completed between Commerzbank, Siemens, and Continental which reduces the time take for the clearing of funds. This according to a press release, February 21, 2019,

A Good First Run

Blockchain was recently utilized to conduct a money market security transaction pilot. Participating companies in this successful pilot were German banking and financial services company Commerzbank, Continental, and Siemens.

This one of many successful pilots in recent times carried out through blockchain. Other similar projects include the Sumitomo Mitsui Banking Corporation (SMBC) who completed a successful pilot on R3’s Marco Polo Trade platform on February 18, 2019, and a joint pilot launched between the UAE and Saudi Arabian Governments On January 19, 2019, to facilitate cross-border payments.

Money market securities traditionally take two days to fully clear the payment, they are used short-term financing instruments by businesses and mature in a year’s time. However, with the use of blockchain, the time needed to clear payment is significantly reduced.

Details About the Project

When the pilot was conducted, it was the first time that any of the firms involved had done such a money market transaction using blockchain. The money market security was worth $113,340 and during the pilot, which took place in January 2019, Continental was the issuer of the security, Commerzbank helped provide the use of R3’s security platform and Siemens acted as the investor, subscribing to the money market security.

The use of blockchain not only reduced the amount of time needed to clear the payments but also made the entire process more effective and transparent. This was attested to by Peter Rathgeb, Corporate Treasurer at Siemens, who said:

“The significantly shorter throughput times and faster time-to-market show clear advantages of this technology [blockchain]. Key challenges include security and performance issues, as well as legal issues such as the need to create a consistent European standard and understanding of the law on blockchain-based transactions,”

This isn’t the first time that Siemens or Commerzbank are taking part in blockchain-related activities. In December 2018, Commerzbank took part in a commercial paper transaction on the Corda platform with Natixis, a French financial firm and Rabobank, a Dutch financial services firm. During the trial, Commerzbank developed the blockchain Network and software that was to be used for the pilot, which was worth $113,340.

In 2018, Siemens joined the Energy Web Foundation (EWF), a scalable blockchain platform committed to the promotion of blockchain technology in the energy sector.

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