Commerzbank has teamed up with Continental and Siemens to carry out a EUR100,000 test commercial paper transaction using blockchain technology.
Commerzbank provided a blockchain platform based on R3's Corda for the transaction, with Continental acting as the issuer of the money market security, which was in the form of a euro-denominated electronic commercial paper, and Siemens subscribing as an investor.
A regular securities transaction between two companies was used as a starting point, with the partners not only generating the money market security, but also processing the trade - including payment processing - in a legally binding manner using blockchain.
By using the blockchain technology, the documents and funds were exchanged in a matter of minutes rather than days.
Commerzbank found itself in a new role: unlike with conventional transactions, the bank was no longer acting as a broker between contracting parties, but as a platform operator and service partner. It provided the platform and all the technical requirements for blockchain trading, the legal structure and the digital money for direct trading of the money market security.
Roman Schmidt, divisional board member for capital markets, Commerzbank, says: "Blockchain technology has tremendous potential in making capital market transactions quicker, more straightforward and more efficient for our customers."
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