One of Germany’s largest banks has revealed it’s been trialing blockchain technology for machine-to-machine (M2M) payments.
One August 8th, the Frankfurt-based Commerzbank AG — Germany’s second biggest banking institution — declared it’s a tested a blockchain payments solution that automates payments between trucks and charging stations.
As the bank noted in their release:
“A fully automated payment process between an electric charging point and a Daimler truck system has taken place. For this transaction, Commerzbank issued Euros on a blockchain and provided Daimler Trucks with “cash on ledger” (i.e. the money on the blockchain) to process the payment.”
Such an M2M pilot represents a use case that some have in the cryptoeconomy have long championed, and it’s a relatively simple one compared to wider opportunities that could be possible in the future. Commerzbank said the tech showed how “machines are increasingly interconnected with each other and operating with rising degrees of autonomy.”
The takeaway? Widespread automated payments are coming, meaning humans will no longer be required to facilitate transactions as intermediaries in thousands of different kinds of transactions.
Stephan Müller, Commerzbank’s Divisional Board Member Transaction Banking, said the bank saw the blockchain project as part of its operational mandate:
“After having completely digitised securities transactions in past pilot projects, the focus is now shifting to DLT-based payment structures. As a bank we see our mandate as creating new digital payment architectures for our clients.”
For now, there’s no word from Commerzbank regarding what blockchain infrastructure it used for its latest M2M pilot, e.g. a fork of Ethereum or it’s own in-house distributed ledger. Still, the forward-looking and customer-minded pivot is rather fitting for an institution whose motto is “The bank at your side.”
If blockchain-based M2M payments end up taking off, Commzerbank’s new effort will be looked back on as one of the earliest mainstream thrusts in the field.
Germany Sees Rising Status as Blockchain Hub
The European powerhouse has been bustling with notable blockchain activity in recent months.
Last month, the nation’s top financial watchdog — BaFin — approved tokenization startup Fundament’s application for a €250 million euro bond offering tied to real estate that’s been tokenized on Ethereum.
“It has indeed been the first time we have approved a prospectus regarding blockchain-based real estate bonds,” the regulator noted in July.
Back in the spring, German cryptocurrency lending platform Bitbond released its Bitbond Token (BB1) security token to international investors with permission from BaFin. The first security token launched in Germany, the BB1 was notably built atop the Stellar blockchain.
In December 2018, Boerse Stuttgart — approximately the 10th largest stock exchange in Europe and the second largest in Germany — revealed it had partnered with fledgling Berlin-based institution solarisBank for banking services. The collaboration came as the exchange was preparing to launch a cryptocurrency trading platform called Bison, which was released at the beginning of this year.
Last fall, Bitcoin Group SE, owners of P2P crypto exchange bitcoin.de, said they had agreed to acquire the Frankfurt-based Tremmel Securities Trading Bank. The move was part of the group’s bid to achieve a traditional banking license in the country.
In 2018, Germany also saw Bitbond use bitcoin in international credit transfers for the first time. Just prior to that, the German National Tourist Board (GNTB) agreed to start accepting cryptocurrencies for its services.
“Through accepting cryptocurrencies as a payment method and the possible medium-term implementation of the blockchain technology in our finance sector, our international company wishes to set ourselves apart as an innovator and instigator within the tourism industry,” GNTB board chairman Petra Hedorfer commented.
Zooming out, these kinds of embraces are becoming increasingly common in Germany, and there’s no reason to think that dynamic will slow any time soon.
Crypto Business World
CBW - External Analyst