In January Commerzbank provided a blockchain platform for a pilot money market transaction.
Continental issued a 3-day €100,000 security directly to Siemens, without using Commerzbank as the broker. The bank simply acted as the platform provider and service partner.
The companies generated the money market security and processed the trade using blockchain. The settlement was made on-chain using digital cash enabled by Commerzbank which has an e-money license. And the whole process took minutes rather than days.
Speeding up the turnaround is especially important for money market transactions which are typically short term. So the first advantage is faster payments which can usually take up to two days to settle. Secondly, blockchain enables transparency so that all parties can see everything at the same time and all participants can read and write data. In turn, this means the bank’s role as broker evolves.
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