Commerzbank and steel producer ThyssenKrupp replicated on Wednesday a foreign exchange (forex) transaction with the help of blockchain technology, making this the first deal of its kind for a German company.
The parties concluded that blockchain could be used to speed up processing and cut costs. On Thursday, Frankfurt-based Commerzbank said the technology did a great job at reducing errors and delays.
ThyssenKrupp traded an EUR/PLN FX Forward deal with Commerzbank, using the latter’s FX Live Trader platform. The deal, which totaled 500,000 euro with a one-month tenor, was replicated on blockchain. The confirmation was sent to ThyssenKrupp via Corda, a blockchain platform developed by the R3 consortium.
Commerzbank manager Nikolaus Giesbert commented on the transaction:
“Reconciliation is a major issue for banks when trading FX. Significant resources are dedicated to resolving the issues that occur during the matching process. This deal demonstrates how the use of distributed ledger can transform and digitalize the processes in this space.”
“Commerzbank is pleased to be working with ThyssenKrupp on this deal and to further develop digital banking solutions for corporate,” he added.
Even though the deal was confirmed as successful, the German bank noted that further development of technical, regulatory and legal conditions was needed in order to leverage the full potential of blockchain.
Thomas Empelmann, head of corporate finance at ThyssenKrupp, said:
“The comprehensive insight into the Blockchain process clearly shows how to connect market participants in the future in a highly secure and efficient manner while reducing transaction costs by avoiding external software solutions.”
He added that the technology simplified processes, ensured maximum transparency, and reduced the difficulties related to financial integration.
Last year, Commerzbank - along with Erste Group Bank, Bank of Montreal, and CaixaBank - became part of the blockchain-based trade initiative of UBS Group and IBM, which together created blockchain platform Batavia.