- Commerzbank announced it was involved in a blockchain project with two firms, BASF and Evonik.
- Supply chain payments ended up being verified, paid, and logged automatically through smart contracts.
- The digital cash used was e-money when seen from a legal standpoint.
Commerzbank teamed up with two chemical companies in the attempt of testing a blockchain that is shared and intended for handling bilateral supply chain processes within a live environment.
Throughout the test, payments between two companies known as Evonik and BASF were checked, as well as paid and booked in a fully automated as well as digital method through a programmed payment process.
That being the case, Evonik and BASF transmitted business process-relevant data to the Commerzbank blockchain platform through the help of a data service provider known as Elemica.
This platform generated a complete and tamper-proof depiction of the relevant business processes, where the data and the blockchain managed to get used to actually automate the payments altogether.
Due to this, e-money was made available for the partners for trading on the distributed ledger technology platform and payments were processed once the transaction was automatically validated through the smart contracts as well as programmable money.
The Senior Digital Strategist at Evonik Digital known as Heinz-Günter Lux had the following to say about it: “The payment process via blockchain and by means of programmable money along our existing process chains is definitely more transparent, quicker and more reliable. It is an important building block towards the development of fully autonomous supply chains”.
To summarize, supply chain payments were fully verified, paid and logged in a fully automated manner through the usage of smart contracts, and programmable money was used to complete this process.
Following this pilot, the firms agreed to expand the project to other supply-chain partners within the coming months.
If we look through the history of these companies, Commerzbank announced all the way back in July of 2017 that it was looking at blockchain technology as a means of digitizing the supply chain, and even BASF’s involvement with this technology dates back to 2017 when it revealed that it was investigating in the potential in tracking the shipments of goods.
Just imagine a future where you can essentially have an automated production line as well as an inventory process. Here, the program or smart contracts could see what level of a certain input is low and can automatically order the required materials from a supplier. When they arrive, the production system can log the new inventories, and once they pass quality checks, another smart contract can trigger a payment through the usage of cash on the digital ledger. The bank in turn will take a small cut of the money as a financing charge for early payments though.
While this programmable money may seem exciting, they currently have one challenge that could potentially be solved in the future, and this is the fact that all parties simply have to use Commerzbank’s e-money or cash ledger.
Discussing the Commerzbank blockchain, it is an R3 Coda enterprise blockchain, wherein 2019 it actually ran tokenized cash trials for machine-to-machine payments through Daimer and repo transactions with the Deutsche Börse. It is sufficient to say that the bank has had its eye set out on blockchain technology for a very, very long time, and is currently reaping the spoils of progress.
This definitely marks a future for blockchain technology when it comes to the supply chain industry and will definitely streamline things and make them a lot quicker, which will inevitably lead to a lot more progress and worldwide acceptance of it.