BMW AG has begun using a blockchain-based platform to automate part of its foreign exchange operations, the German carmaker announced on Tuesday.
BMW is now relying on JPMorgan Chase & Co.’s Kinexys network for cash reserve transfers between its European and US accounts. The system automatically moves euros from BMW’s Frankfurt accounts to New York whenever its dollar balances fall below a preset level, taking down instances when treasury staff are required to manually intervene.
The German automobile manufacturer and financial firm JPMorgan said the blockchain-based setup will see transfers settled within seconds and operate 24 hours a day.
Naveen Mallela, global co-head of Kinexys, told Bloomberg the platform’s speed and programmability will help BMW operate with less idle capital and reduce the need for additional buffers in case its US accounts fall short during periods of heavy spending.
In written responses shared with Bloomberg, Stefan Richmann, head of BMW Group treasury, said the programmability of the network was a decisive factor because transactions can be executed “based on predefined conditions without manual intervention.”
Kinexys, launched in 2019, currently handles about $5 billion in daily payment flows. While that is still small compared to the roughly $10 trillion processed each day by JPMorgan’s payments division, the bank believes the blockchain-based network is the future automated financial infrastructure.
BMW’s blockchain interest started in 2019
BMW’s adoption of Kinexys is the latest juncture in its broader interest in blockchain systems for both financial and industrial operations. The company has spent years testing and deploying distributed ledger technology on its supply chain, a project that began in late 2019.
About three years ago, the carmaker had been using the blockchain in purchasing to track the movement of components and raw materials in multi-stage supply routes.
“We conducted a successful pilot project for purchasing front lights in 2019. This year, we want to expand the project to a large number of other suppliers,” said Andreas Wendt, a former management board member responsible for Purchasing and Supplier Network, in a company statement published in 2020.
The automaker created the PartChain initiative to build a common data layer shared across its supplier ecosystem, which reportedly delivered “near-instant access” to histories and certification data.
“PartChain enables tamper-proof and consistently verifiable collection and transaction of data in our supply chain,” Wendt said.
Two years later, around December 2022, layer-2 cross-chain platform Coinweb announced a partnership with the automaker to embed blockchain-based tools into BMW’s operations in Thailand.
According to a press statement from Coinweb, the collaboration would also support a loyalty program built on a Software as a Service Web3 application. That system would allow BMW customers in Thailand to earn and redeem rewards through Binance’s BNB Chain, which was selected as the underlying network. Customers would collect rewards for different activities linked to their tier level and later spend them on BMW products or services.
Leadership changes as BMW deploys new technology
The company’s push into blockchain systems comes as BMW’s top offices prepare for a leadership transition. On Tuesday, the supervisory board appointed Milan Nedeljkovic as the company’s next chief executive officer, replacing long-time CEO Oliver Zipse.
Nedeljkovic, who is currently BMW’s head of production, will assume control on May 14 next year, and his mandate will run until 2031. The 56-year-old executive has been with BMW since 1993, when he joined the company as a trainee.
He later worked in several BMW locations in Germany and at the company’s plant in Oxford before joining the management board in 2019.
Supervisory board chairman Nicolas Peter surmised that Nedeljkovic has built a reputation for uniting teams and motivating them “to achieve peak performance,” which he deemed was “a crucial leadership quality for continuing the BMW Group’s successful trajectory during the current transformation.”
61-year-old Zipse will resign by mutual agreement on May 13 next year, the date set for BMW’s 2026 annual general meeting. Earlier this year, Airbus announced that Zipse could join its board of directors after completing his time at BMW. Peter credited him with steering the company through the 2019 pandemic and the “Neue Klasse,” BMW’s next-generation vehicle platform.
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Source: https://www.cryptopolitan.com/bmw-blockchain-to-automate-forex-transaction/
