I’ve been reading up on Schuldschein and how it’s helped streamline financing in corporations.
Leads me to think about how blockchain with extend this. Not just easier for big companies, also could adapt to allow many more investors and smaller players than the regulations have allowed in the past
Imagining a future where instead of buying a car, we invest in a transportation company and cooperate. Whether that’s ride sharing in auto driven cars, voting on features or rent/lease for personal use.
We adapted from buying a car outright to installment loans and lease instruments. The future may bring more fractional ownership in cars, or the companies that make them.
And this applies to more than just transportation.
When the manufacturing company behind Mercedes-Benz issued its first blockchain bond last month, it did something that impacts much more than just a single automobile brand.
As revealed to CoinDesk, the â€šÂ¬100m bond, issued on a private version of the ethereum blockchain signals the first step in a much larger plan by Daimler AG to explore the technology. But it’s the type of bond -called a Schuldschein -that gives the project a truly global scale.
Since the financial crisis of 2008, this German version of a private placement has seen an explosion of use around the world, now totaling more than â€šÂ¬20bn annually.
But while Daimler itself says large-scale use of an ethereum-based Schuldschein isn’t likely anytime in the near future, its success is already encouraging the German firm to test even more use cases.
According to Daimler AG’s senior manager of treasury process management, Eva-Marie Scholz, multiple business departments in the firm are now exploring use cases as a result.
Scholz told CoinDesk:
“It was definitely not disappointing. [Reflecting on] the process, we are able to review the potential of blockchain to make real business model changes for overall capital markets and banking transactions.“
More specifically, the Schuldschein is a way for corporations to borrow money from a small group of private investors with only minimal disclosure and regulatory requirements, typically for between 3â‚¬â€œ10 years and in amounts as high as â€šÂ¬500m.
For Daimler’s first blockchain-based bond, which was designed to simplify the lending process, the automaker partnered with Landesbank Baden-WÃƒÂ¼rttemberg (LBBW) to sell a relatively short-term one-year bond to savings banks Esslingen-NÃƒÂ¼rtingen, Ludwigsburg and Ostalb.
But for a firm that generated â€šÂ¬153bn in revenue last year, the bond signals just a drop in the bucket of the total number of Schuldscheins sold in a typical year.
“Daimler issues around 50 to 70 bonds annually,” said Orhan Oezcelik from Daimler’s capital markets division. “While we don’t expect blockchain to impact the total volume of issuances, the technology could allow a greater number of transactions which would then be smaller in size.“