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Daimler trials blockchain for financial transactions

Daimler has partnered with LBBW – the regional bank for the company’s home state of Baden-Württemberg – in testing blockchain technology for the execution of financial transactions.

“Daimler and LBBW successfully tested this innovative technology for capital markets in parallel with the process that is required by regulatory authorities,” the companies announced in a joint statement.

“Through LBBW, Daimler launched a €100 million, one-year corporate [note of debt].

“The entire transaction – from the origination, distribution, allocation and execution of the…loan agreement to the confirmation of repayment and of interest payments – was digitally carried out via blockchain technology in cooperation with the [companies’ respective] IT subsidiaries.”

According to Daimler, the pilot project is a “first step in testing the wide variety of possibilities for using blockchain technology” and assessing the technology’s potential for future transactions and financial processes.

“[We also] conduct other projects to determine where blockchains could also be used to increase efficiency and support our business models,” said Bodo Uebber, the Board Member responsible for Finance & Controlling and Daimler Financial Services.

“This pilot shows our competence at digitisation of financial services for our corporate customers. Technical progress opens completely new ways to make financial processes simpler and more efficient and enables new business models,” added Rainer Neske, Chairman of the Board of Managing Directors of LBBW.

“We want to exploit this potential in order to further improve banking services for our customers.”

Kurt Schäfer, Vice President Daimler Treasury, said, “Blockchain can affect nearly the entire value chain. That’s why we…want to play an active role in the global blockchain community and help shape the cross-sector blockchain standards.

“We want to do this in all the areas of application that are important to us: customer relations, sales and marketing, supplier management, digital services, and financial services.”

Joachim Erdle, Head of Corporate Finance at LBBW, said, “ Blockchain technology will change the role of banks as intermediaries in the economic process.

“We don’t want to merely observe this development; we want to proactively shape this field.”

Blockchain technology is said expected to increase the automation of financial transactions so that they can be concluded much faster and more cost-efficient than in the past. The technology is based on ‘blocks’ of digital data are decentrally saved on several servers. Transactions receive a cryptographic signature that makes it much harder to manipulate them.

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