Daimler, German bank launch corporate loan instrument via blockchain

Daimler AG and Landesbank Baden-Württemberg have jointly used blockchain technology to execute their first financial transaction.

The partners tested the technology for capital markets in the execution of a process required by regulatory authorities: Through LBBW, Daimler launched a 100 million euro ($113.5 million), 1-year corporate Schuldschein (certificate of indebtedness) within which savings banks Esslingen-Nürtingen, Ludwigsburg, Ostalb and LBBW acted as lenders.

According to a press release, the entire transaction — from origination, distribution, allocation and execution of the agreement to confirmation of repayment and interest payments — was carried out via blockchain technology in cooperation with the the Daimler IT subsidiary TSS and the LBBW subsidiaryTargens.

"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," said Bodo Uebber, a member of the board of management of Daimler AG responsible for finance and controlling and Daimler Financial Services. "Simultaneously with launching the Schuldschein, we conduct other projects to determine where blockchains could also be used to increase efficiency and support our business models."

"This pilot shows our competence at digitization of financial services for our corporate customers," said Rainer Neske, chairman of the board of managing directors of LBBW. "Technical progress opens completely new ways to make financial processes simpler and more efficient and enables new business models. We want to exploit this potential in order to further improve banking services for our customers."