Commerzbank and Thyssenkrupp Completes Deal Via Blockchain Platform
As the development of blockchain technology continues to roll out, more and more institutions are adopting it into their system. And among these are the financial sector. Blockchain tech is viewed as a major catalyst for the evolution of this industry.
In one of the most recent transactions done through blockchain, German bank Commerzbank and steel enterprise Thyssenkrupp completed a €500,000 forex exchange. The negotiation was done Wednesday where Thyssenkrupp started it by using Commerzbank’s FX Live Trader system.
The trade was then verified by Corda, a distributed ledger technology running on an R3-based blockchain platform. The EUR/PLN negotiation was agreed on a 30-day tenor.
Commerzbank is just one of the many counting houses that adopted the blockchain technology because it can facilitate payment while lowering the risk of operations, including foreign exchange trade. And since the transaction is stashed in a single, immutable digital file it eliminates the need for synchronization between two parties.
Other malicious activities like fraud and data duplication are also taken out the equation since the ledger is designed to deal with such problems. Commerzbank Head of Fixed Income Nikolaus Giesbert commended the blockchain technology and how it improved their traditional platform.
“Significant resources are dedicated to resolving the issues that occur during the matching process,” Giesbert said following the transaction. “This deal demonstrates how the use of distributed ledger can transform and digitalize the processes in this space.”
The Fintech market is a competitive industry and if a company doesn’t integrate the latest technological advancement, it’s most likely their competitors will overtake them. This is why numerous banks are implementing blockchain tech despite the technology being relatively new in the industry.
Of course, this isn’t to say that they are going in blind. Millions are being poured by these banks for research purposes trying to understand how they can take full advantage of this nascent innovation while mitigating the risk that it possesses.
And there are indeed risks. While blockchain technology does offer security and transparency among other things, it’s also vulnerable to hacking. This week, a privacy-based crypto company called Verge have been attacked again by hackers where they took $1.7 million in the span of four hours. The attack is the second time in just two months where the company suffered a similar exploitation in the early days of April.