Commerzbank, Siemens and Continental Joint Money Market Pilot On Blockchain

The German technology companies, Siemens and Continental, and Commerzbank, a banking and financial services firm jointly completed a money market pilot project on blockchain. This security transaction took place in January. Companies use money market securities to finance their needs. These short-term assets usually mature within one year or less. Due to the clearing procedure, it takes a couple of day to process payment.

The three German companies used the blockchain technology for the first time to conduct a money market security transaction. The Commerzbank provided the R3’s Corda-based blockchain platform used for the $113,340 (100, 000 euro) worth project. While Siemens applied as an investor to the money market security, Continental was the issuer of the short-term asset.

The blockchain technology improved the process of this money market security transaction. It enhanced the transperancy, flexibility, and efficiency of the deal. The Corporate Treasurer at Siemens, Peter Rathgeb, also revealed other benefits of this blockchain platform. According to him, the transaction was faster as it took shorter time to complete the deal.

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However, he pointed out that performance and security issues were the major challenges of this platform. Legal issues can also limit the application of blockchain technology in money market security transactions. Creation of European guidelines and understanding of the regulations controlling blockchain-based transactions may also become a problem.

Also, Commerzbank partnered with Natixis, a French corporate and investment bank and Rabobank, a Dutch financial services company in late 2018. The three parties completed a commercial paper deal of 100,000 euro ($133,340) on the Corda platform. In addition to the software used for the transaction, Commerzbank also created the pilot framework. Besides, the German banking and financial services firm distributed ledger (DLT) network for the deal.

Blockchain And Energy Production

In collaboration with the Energy Web Foundation (EWF), a scalable blockchain framework, Siemens promoted the adoption of decentralized technologies in the energy industry. The officials of this German technology giant maintained that the blockchain will enhance interaction among energy producers, network operators and the consumers.

The blockchain-driven energy platform will promote interoperability in energy the sector. The partnership of Siemens with EWF is expected to provide operational, regulatory and market solutions. This development will encourage new forms of financing projects and increase the efficiency of the energy sector.

A press release by Siemens published November 21st 2018, revealed that the technology company has already implemented the use of blockchain technology. Coupled with microgrid control solutions, Siemens improves its control on energy consumption. A project conducted by the tech company and the U.S in 2016 on the creation of microgids is effective in controlling energy use. During its testing Brooklyn, the microgrids diverted excess electricity back to the local grid.

Besides the application of blockchain in the energy sector, Siemens Financial Services (SFS) also used the technology. The financing section of the German tech company used R3 Corda-based blockchain framework for bank guarantees. This blockchain pilot was launched In August by Standard Chartered (SC), a U.K multinational banking and financial service firm.

Besides Germany, various countries have tested the blockchain technology in the different sectors of their economies. The blockchain improves not only the money market security but energy production as well.

What do you think about this blockchain partnership? Share your thoughts.

Max writes about blockchain projects and regulation with a special focus on United States and China. He joined Smarterum after years of writing for various media outlets.


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