Auto News Travel & mobility

MOBI releases standards for using blockchain in vehicle financing

vehicle car loan financing

Today the mobility blockchain consortium MOBI released standards for using blockchain to share vehicle financing information between customers, manufacturers, dealers and lenders. 

Using decentralized data can increase transparency, making it possible to address fraud, enable innovative business models and also enhance data privacy within the automotive sector. Ultimately the aim is to reduce the cost of financing and remove some of the friction involved in getting finance.

“Blockchains and distributed ledgers will enable better accuracy, transparency, and process efficiencies by allowing financial institutions to trust the data they have, mitigate risk, have more confidence in their decisions, and ultimately help the industry realize digital transformation more quickly,” said Phil Masi, President of BMW Bank of North America. 

The consortium created the Finance, Securitization, and Smart Contracts (FSSC) Working Group to explore the topic, led by lawyers Orrick, Herrington & Sutcliffe and financing firm RouteOne. Other participants include Accenture, BMW Bank, Ford Credit, USAA and 14 others.

Financing for mobility is a pretty massive topic and the working group focused on 11 use cases:

  •     Know Your Customer (KYC) Requirements
  •     Dealer Floorplan Financing
  •     Dealer Floorplan Auditing
  •     A Blockchain Foundation for Securitization
  •     Verifiable Credentials in the Loan Application Process
  •     Digitization of Manual Processes with Smart Contracts
  •     Non Risk-Based Credit
  •     Loan Servicing
  •     V2X and Securitization (communication between vehicle and anything)
  •     Issuance and Investor Impact Reporting for Green Bonds
  •     Fractional Ownership of Mobility Assets

As can be seen from the list, some of the applications aren’t pure blockchain, but also incorporate decentralized identity for KYC and verifiable credentials.

This is the fourth set of standards produced by MOBI. A standard for Vehicle Identity (VID) was the first one, and is now at its second iteration

Another standard is for connecting electric vehicles to the grid, an area where there’s significant activity. Recharging cars is an obvious application, but there’s more. Electric vehicles can play an important role in renewable energy, for example, by using a car’s battery to store solar energy for later use within a home.

A third standard is for creating a mobility marketplace. A marketplace would enable travelers to make seamless journeys using different forms of transit. For example, using a single mobile app to book a journey door-to-door might include a taxi and multiple trains.