BMW Uses Blockchain For Vehicle Financing In Thailand. BMW, a German auto brand manufacturer, announced a partnership with Coinweb, a layer 2 blockchain interoperability protocol to introduce blockchain-based processes into its operations on December 29, 2022.
This cooperation considers two different tasks. The first includes the development of a smart contract platform with the aim of streamlining the various processes that need to be completed for the financing of BMW branded vehicles.
According to the press release, this will include the implementation of a fully integrated Know Your Customer (KYC) Anti-Money Laundering (AML) tool adapted to local Thai laws.
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The second task is the creation of a blockchain-based loyalty program to reward brand customers with products and services, assigning a rating to each customer that is directly related to their accumulated rewards.
Coinweb states it will use Binance’s Bnb Chain as the anchor chain for this transaction due to its performance to cost ratio. However, transactions can be broadcast to other blockchains if needed.
Benefits of Blockchain Technology
BMW Leasing CEO in Thailand, Bjorn Antonsson explains the benefits of shifting some of his processes to a decentralized technology platform.
“We predict that the shift from manual documents to immutable records on the blockchain will greatly contribute to efficiency and perfect transparency,” said Antonsson quoted from Bitcoin.com, Tuesday (3/1/2023).
The BMW deal comes at a time when blockchain-based technology is affected by the downward trend of the cryptocurrency market partly due to the collapse of FTX, one of the world’s largest crypto exchanges.
As stated by Nobel laureate Paul Krugman on December 1, several important non-crypto blockchain-based projects such as Tradelens, a Maersk-backed global trading platform, and a blockchain-based engine under development for the Australian Stock Exchange, were recently cancelled.
Even so, Coinweb is positive about the results this alliance can provide for perceptions of how useful blockchain technology is.
Previously, in May 2022, the head of securities and payments for the Australian Stock Exchange (ASX) which runs the Australian stock exchange, Tim Hogben informed traders, stock register operators and clearing house representatives about the use of blockchain technology.
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The blockchain-based technology project is largely ready after seven years of development. If the project is successful, it will put ASX on the verge of being the world’s first transformation using blockchain technology.
BMW Uses Blockchain For Vehicle Financing In Thailand. “Ninety-six percent of the software is currently in an operating and testing environment. 96 percent of the software is working,” Hogben told an Association of Stockbrokers and Investment Advisors conference, in a recording seen by Reuters. 21/12/2022).
However, in November, ASX abandoned the project, citing dysfunctional management, concerns about the product’s complexity and scalability, and difficulties finding experts to back it up.
The layoffs came after new CEO Helen Lofthouse commissioned an Accenture review that found rebuilds were only 63 percent delivered and nearly half of the code required rewriting.
Loss of Trust
More than a dozen brokers, other market participants and people directly involved in the blockchain project told Reuters the fiasco had shaken operators’ faith in the Australian exchange.
Some expressed disappointment at the time and expense they contributed to the failed venture and ASX’s repeated assurances all was well with the upgrade, which has faced five delays since its initial scheduled launch in 2020.
The experience also raises questions about the discrepancy between the promise and reality of the technology that underpins cryptocurrencies.
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The use of distributed ledgers in Australia’s critical financial infrastructure will be one of the most significant applications of blockchain-based systems in mainstream enterprise settings.
An ASX spokesperson told Reuters in an email the company is providing project updates based on the latest available information and some challenges.
Previously, US Senator John Boozman revealed that even though it is called a cryptocurrency, Bitcoin is still considered a commodity, not a currency. He emphasized that exchanges where commodities are traded, including bitcoin, must be regulated by the Commodity Futures Trading Commission (CFTC).
“Bitcoin, even though it’s a cryptocurrency, it’s still a commodity. It’s a commodity in the eyes of federal courts and the opinion of the chairman of the Securities and Exchange Commission (SEC). There is no dispute about this,” Boozman said in a hearing, quoted from Bitcoin.com, Tuesday (6/12/2022).
Calling FTX’s collapse a shock, the senator said public reports showed a lack of risk management, conflicts of interest and misuse of customer funds.
Senator Boozman went on to talk about crypto regulation and empowering the Commodity Futures Trading Commission (CFTC) as the primary regulator of the spot crypto market.
“The CFTC has consistently demonstrated its willingness to protect consumers through enforcement action against bad actors,” continued Senator Boozman.
Boozman believes the CFTC is the right agency for an expanded regulatory role in the digital commodity spot market.
In August 2022, Boozman and several senators introduced the Digital Commodity Consumer Protection Act (DCCPA) to empower the CFTC with exclusive jurisdiction over the digital commodity spot market.
Two other bills have been introduced in Congress this year to make the derivatives regulator the primary watchdog for the crypto sector.
BMW Uses Blockchain For Vehicle Financing In Thailand. While bitcoin is a commodity, SEC Chairman Gary Gensler has repeatedly said most other crypto tokens are securities.
