Commerzbank, one of the major German banks, and Thyssenkrupp, one of the biggest steel conglomerates in the world have made the first forex transaction with the blockchain technology application. The transaction was then confirmed directly through Corda, a distributed ledger technology (DLT) of the R3 blockchain consortium.
The transaction was then confirmed directly through Corda, a distributed ledger technology (DLT) of the R3 blockchain consortium. The use of blockchain technology, which underpins the Bitcoin virtual currency, could help reduce delays and manual errors, as well as “significantly reduce operational risks in foreign exchange transactions”, according to the the Commerzbank website. This eliminates the need for transaction synchronization because the transaction is stored as a single, unchangeable record.
The blockchain allows eliminating delays and numerous errors with money transfers, as well as eliminates high costs and fees paid to intermediaries.This transaction symbolizes a very important step in the introduction of the blockchain technology into the banking system and the traditional financial world.
Nikolaus Giesbert, Head of Fixed Income at Commerzbank, says blockchain will enable low transaction fees and secure data through a self-contained, unified network and infallible, fraud-proof transaction processing
Banks and financial institutions globally have recently been running blockchain pilots for various types of transactions. In late April, Spanish Bank BBVA became the first global bank to issue a loan on a blockchain. The bank stated that using a distributed ledger cut the time to process the loan from “days to hours”.