Daimler AG and Landesbank Baden-Württemberg (LBBW) for the first time have jointly used blockchain technology to execute a financial transaction. Daimler and LBBW successfully tested this innovative technology for capital markets in parallel with the process that is required by regulatory authorities. Through LBBW, Daimler launched a €100 million 1 year corporate Schuldschein within which savings banks (Kreissparkasse) Esslingen-Nürtingen, Ludwigsburg and Ostalb as well as LBBW acted as lenders. The entire transaction — from the origination, distribution, allocation and execution of the Schuldschein loan agreement to the confirmation of repayment and of interest payments — was digitally carried out via blockchain technology in cooperation with the IT subsidiaries TSS (Daimler) and Targens (LBBW).
This pilot project is our first step in testing the wide variety of possibilities for using blockchain technology and assessing this technology’s potential for future transactions and financial processes.
Test the potential & gather know-how
By means of this pilot project, Daimler as well as LBBW want to thoroughly test the potential of blockchain early on and gather know-how for the creation of new business models. Moreover, Daimler implements an open-source culture, actively shapes the future of the »Internet of Values«, and gains access to talented individuals and innovations as an active partner in the global technology and startup environment.
Daimler was an ideal partner for us, because this company is also greatly interested in using blockchain. Thanks to the constructive and agile collaboration in a joint team, we were soon able to use this technology in a real transaction.
The joint pilot project of Daimler and LBBW clearly shows that financing parties interact more intensively these days and that the roles of various players in the market change. Blockchain will increase the automation of financial transactions so that they can be concluded much faster and more cost-efficient than in the past. As a result, digital processes will replace labor-intensive manual steps that are so far necessary for processing Schuldscheindarlehen — for example during the creation of loan contracts and the examination of received payments. Daimler and LBBW expect blockchain to have similar efficiency-enhancing potential with regard to syndicated loan transactions and export financing.
We, as a leading automaker, want to play an active role in the global blockchain community and help shape the cross-sector blockchain standards.
Blockchain technology makes it possible to conduct direct and secure financial transactions worldwide within seconds. In this technology, blocks of digital data are decentrally saved on several servers. The transactions also receive a cryptographic signature that makes it much harder to manipulate them.