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Commerzbank, Thyssenkrupp Conduct FX Deal Through Blockchain

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Germany's Commerzbank and steel giant thyssenkrupp have completed a pilot forex forward transaction of 500 thousand euros through blockchain.

thyssenkrupp initiated the EUR/PLN FX Forward deal using FX Live Trader, Commerzbank's flagship currency trading platform. The deal confirmation was sent to thyssenkrupp directly through Corda, a distributed ledger designed by the R3 blockchain consortium.

With this pilot deal, both Commerzbank and thyssenkrupp have now affirmed a real FX transaction through via Blockchain.

In a statement, Commerzbank noted that the use of Blockchain completely eliminates the need for a manual or semi-automated reconciliation between the client and the bank, and drastically reduce operational risks in FX transactions.

The company said that the option of offering FX Post Trade Confirmation and Matching via Blockchain may offer significant benefits in the future.

Nikolaus Giesbert of Commerzbank said, "Reconciliation is a major issue for banks when trading FX. Significant resources are dedicated to resolving the issues that occur during the matching process. This deal demonstrates how the use of distributed ledger can transform and digitalise the processes in this space."

Thomas Empelmann, Head of Corporate Finance, thyssenkrupp said that the company monitors digital developments very closely and plans to introduce more applications with associated value for treasury operations.

Financial institutions around the world are adopting blockchain aiming to improve the efficiency and security in the transactions.

According to a recent Deloitte LLP survey, major organizations see a "compelling business case" for the use of blockchain, and many are moving forward with the technology.

In April, Spanish bank BBVA probably became the first bank in the world to issue Blockchain technology-based corporate loans. The bank stated that using a distributed ledger cut the time to process the €75 mln loan from "days to hours."

In India, seven banks has partnered with IT giant Infosys for a blockchain-based trade finance network. ICICI bank also announced a blockchain trade finance initiative involving over 250 companies.

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