BMW AG is turning to blockchain technology to automate some of its foreign exchange (FX) transactions, amidst rising global adoption.
Blockchain allows firms to accelerate and simplify cross-border payments, and more firms and institutions are choosing the innovative technology.
For its first FX transaction, BMW chose JPMorgan’s blockchain-based platform, Kinexys Digital Payments, which acts as a digital ledger for client funds and enables payments that are:
- Instant
- Conditional
- Programmable
Kinexys was launched in 2019, and it handles $5 billion worth of transactions daily.
BMW Uses JPMorgan’s Blockchain to Automate FX Transfers
The latest reports from Bloomberg revealed that the German carmaker started using JPMorgan’s blockchain platform to automatically transfer euros from its Frankfurt accounts when dollar balances in New York drop below a certain threshold.
The publication cited the global co-head of Kinexys, Naveen Mallela, who said that the speed and programmability of the new system will reduce the need for BMW to keep a capital buffer if it has less funds than needed.
He also highlighted that transfers can happen without the need for human intervention, nonstop, and in a matter of seconds, compared to traditional transfers which take place during regular bank hours and take up to days to complete.
Benefits of FX Transfers via Blockchain
The latest move made by BMW is important due to the following reasons:
- Shows increasing interest in blockchain-based systems amidst growing global adoption
- Mirrors interest in automating some of the corporate treasuries’ work
- Explores how AI can help manage cash and liquidity across global operations
Stefan Richmann, head of BMW Group Treasury, said, quoted by Bloomberg, that Kinexys’ programmability was a key element for the FX transactions, as the payments can be executed:
- Based on predefined conditions
- Without manual intervention
BMW’s latest move mirrors the growing blockchain adoption, and how more firms are turning to the innovative technology’s benefits.
JPMorgan, an important TradFi player, has been boosting blockchain adoption for a long time, and the firm recently started rolling out a deposit token called JPM Coin to institutional clients. The JPM Coin allows users to send and receive money on the Base blockchain.
