Earlier on Thursday, February 21, German banking and financial services company, Commerzbank announced the formation of a joint venture with technology companies Continental and Siemens for conducting a money market security transaction pilot by implementing the blockchain technology.
Usually, the processing of payment takes two days due to the clearing process also money market securities are short-term assets that serve for financing companies and normally they have a maturity period of one year or less.
As per reports, this is the first time the aforementioned parties conducted a blockchain-based money market security transaction worth 100,000 euro ($113,340) within a pilot project in the first month of 2019 where Commerzbank provided R3’s Corda-based blockchain platform, Siemens subscribed to the money market security as an investor and the role of the issuer was played by Continental.
As per reports, the blockchain-powered platform permitted firms to improved transparency, flexibility, and efficiency in the deal. Additionally, through a press release dated 21st February, Peter Rathgeb, Corporate Treasurer at Siemens said:
“The significantly shorter throughput times and faster time-to-market show clear advantages of this technology [blockchain]. Key challenges include security and performance issues, as well as legal issues such as the need to create a consistent European standard and understanding of the law on blockchain-based transactions.”
In late 2018, Commerzbank formed a collaboration with Dutch financial services firm Rabobank and French corporate and investment bank Natixis and completed a live 100,000 euro ($113,340) commercial paper transaction on the Corda platform. As per reports the software, distributed ledger (DLT) network for the trade, pilot framework and instructions on regulatory implications was developed by Commerzbank.
Previously, in a bid to promote the use of decentralized technologies in the energy sector, Siemens tied up with a scalable blockchain platform, the Energy Web Foundation (EWF). As per reports, Siemens officials debated on the functionalities of blockchain technology stating that it will be very beneficial for linking consumers with network operators and energy producers will also be increasing interoperability in the area.