HOW DAIMLER USES BLOCKCHAIN-TECHNOLOGY TO RAISE MONEY AND REWARD ECO-FRIENDLY DRIVING
Multinationals outside of the financial industry have started to use blockchain technology for different purposes. German car manufacturers are leading the way. Daimler has already issued a EUR 100m blockchain-based bond and launched its own crypto-currency. Is blockchain finally entering the mainstream economy?
The blockchain industry is getting all excited about big multinationals using their technology. German-based car manufacturing giant Daimler AG is one of the frontrunners. The maker of Mercedes-Benz, ranked number 29 on the Global 2000 list, is experimenting heavily with blockchain-based solutions.
Daimler has introduced a EUR 100m Schuldschein based on blockchain technology
Daimler started using Blockchain on a larger scale in June 2017, when it issued a EUR 100m Schuldschein based on a private version of the Ethereum-blockchain. A Schuldschein is a version of a corporate bond, which does not need to be registered on a stock exchange. Therefore, it is subject to less regulations, offers more flexibility and is usually less expensive.
Daimler partnered with the German bank Landesbank Baden-Württemberg (LBBW) to issue the one-year bond as a pilot project. Although a EUR 100m bond is solely a drop in the bucket of a company that produces annual sales of US$ 164 billion, it is a sign that multinationals have their eyes on blockchain-based financing solutions.
“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,” says Bodo Uebber, member of the Board of Management of Daimler AG.
Daimler’s pilot project is far bigger than Mercedes-Benz. Last year alone, EUR 35 billion of Schuldschein bonds were sold in Europe. If more companies follow Daimler’s example and start using blockchain to issue this type of bond, the asset class may be ripe for disruption.
MobiCoin is Daimlers own cryptocurrency, rewarding eco-friendly driving
Daimler’s blockchain ventures don’t stop here. The company has launched its own blockchain-based digital currency called MobiCoin in February 2018, aiming at rewarding drivers with environmentally-friendly driving habits.
The 500 Daimler cars that took part in the testing phase transmitted data to Daimler. Drivers who drove smoothly and at low speed received MobiCoins which were transmitted to the driver’s mobile application. MobiCoins could then be used to get VIP access to events like DTM races, the fashion week in Berlin, or the Mercedes Cup final.
Other German car-manufactures are following Daimler’s lead and are experimenting with different blockchain-based applications
Daimler is also looking at other uses, including shipment of goods, engineering, securities trade and sales.
Kurt Schäfer, Vice President at Daimler Treasury, says, “Blockchain can affect nearly the entire value chain. That’s why we, as a leading automaker, 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.”
Other German car-manufacturers have established joint-ventures with blockchain companies as well. BMW is working together with VeChain, a blockchain-based supply chain enhancement platform. Porsche is looking into the idea of opening and locking doors via a blockchain-based application and is planning to use the technology to improve safety features and the abilities of driverless cars.
It is encouraging for the blockchain industry that big multinationals, who are not financial industry companies, are experimenting with the technology. With car-makers already using blockchain, it is only a matter of time until other industries start doing the same, and blockchain technology will be entering the mainstream economy.
Should the blockchain be regulated? Click on the link to learn more.