Blockchain Money Market Pilot Completed By Commerzbank, Continental And Siemens

Blockchain, Innovation, News | February 22, 2019 By:

German banking giant Commerzbank, in collaboration with German automotive manufacturing company Continental and tech firm Siemens, has successfully completed a money market security transaction pilot using blockchain.

Money market securities are short-term assets typically with a maturity of one year or less. One of the most important functions of the money market is providing an outlet for large companies with temporary excess cash to invest that cash in short-term money market instruments.

The transaction, which was conducted on Commerzbank’s Corda-based blockchain platform, had a volume of €100,000 ($113,000 USD) and a term of three days. Continental acted as the issuer of the money market security and Siemens subscribed as an investor. According to Commerzbank, the blockchain platforn allowed the companies to exchange the documents and funds in a matter of minutes rather than days.

“For the first time a digital money market security transaction was processed in a legally binding manner,” Commerzbank said. “The money market security was issued purely in digital form, with the purchase price amount in euros converted by Commerzbank – which has an e-money license – into digital money, so that payment could be made using blockchain. All requirements relating to this transaction were handled by digital and legally binding means using blockchain technology.,”

Roman Schmidt, Commerzbank’s divisional board member for capital markets, said that while markets and technologies are constantly changing, established relationships with customers remain an important asset.

“We are pleased to be assisting our customers with the process of digital transformation through transactions like these,” Schmidt said. “Blockchain technology has tremendous potential in making capital market transactions quicker, more straightforward and more efficient for our customers.”