Wednesday, 27 May 2020

Commerzbank completes securities transaction test on blockchain

Commerzbank has completed a money market security test transaction in a blockchain pilot with Continental and Siemens.

The transaction had a volume of €100,000 and a term of three days.

Continental was the issuer of the money market security, a euro-denominated electronic commercial paper, according to legal requirements stipulated in the Luxembourg law.

The bank provided R3’s Corda-based blockchain platform through its research and development unit, Main Incubator, and acted as a service partner.

Siemens subscribed to the money market security as an investor, and corporate law firm GSK Stockmann provided legal advice on the transaction.

In this pilot project, the transaction was initiated and settled directly between the two companies. A regular securities transaction between two companies was used as a starting point.

The companies generated the money market security and processed the trade (including payment processing) in a legally binding manner using blockchain. The documents and funds were exchanged in “a matter of minutes”.

Commerzbank says it was no longer acting as a broker between contracting parties for this particular transaction, but as a platform operator and service partner.

The bank’s interest in blockchain is well known.

As reported in December 2018, R3 partnered with Commerzbank, ING, Natixis and Rabobank, to produce a live commercial paper transaction on the Euro Debt Solution application, built on Corda.

Prior to that, in May 2018, Commerzbank traded an FX forward with industrial group Thyssenkrupp in which the pilot transaction was instantaneously replicated in a blockchain.

Legal disclaimer: The insight, recommendations and analysis presented here are based on corporate filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. They are presented for the purposes of general information only, and all the information belongs to the original publishers. These may contain errors and we make no promises as to the accuracy or usefulness of the information we present. You should not make any investment decision based solely on what you read here.

Creamcoin Marketcap