New Money Market Security Pilot Initiated by Commerzbank, Continental and Siemens with Blockchain
A money market security is a short-term asset that usually is younger than a year and is primarily helpful to financing companies. With this type of security, the time it takes to process a payment is usually about two days before it clears. However, to make this process smoother and more efficient, Commerzbank, Continental, and Siemens have joined together in an effort to conduct a money market security transaction pilot, applying blockchain technology.
The experiment occurred in January last month when the group performed this kind of transaction with 100,000 euros “for the first time.” Continental played the role of the security issuer, while R3’s Corda platform was offered up by Commerzbank. Siemens filled in as the investor to the money market security.
This platform, centered on blockchain technology, made it possible for the company to increase their flexibility, transparency, and effectiveness in the transaction. Peter Rathgeb, the Corporate Treasurer for Siemen, was included in the press release on the matter on February 21st, saying,
“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.”
Towards the end of 2018, Commerzbank collaborated with Natixis and Rabobank to complete a commercial paper transaction worth 100,000 euros, which was also done on the Corda platform. Commerzbank was the head of the pilot’s framework, along with the software and the blockchain network for the trade.
Siemens has also been involved in blockchain technology before as well when he joined the Energy Web Foundation for the implementation of decentralized tech in the energy industry. At the time, Siemens believed that the use of blockchain technology would connect consumers with energy producers and network operators while increasing the area’s use of technology as a whole.