E-money revolutionises the blockchain
The autonomous handling of supply chain finance processes is bound to have a profound impact on the process industry. Orbit Logistics GmbH and AZHOS AG are testing the concept together with well-known chemical companies.
Installing sensors on silos and tank facilities and linking them with blockchain technology makes it possible to process payments autonomously - in contrast to the traditional sequential supply chain processes. The sensor signals then trigger smart contracts: specific program codes on the block chain that guarantee, for example, the execution of financial transactions, provided that predefined conditions are met. Thus the flow of goods and finances could be synchronised in the future.
Real money instead of crypto currency
The greatest challenge was to create system and legal compatibility. This was achieved by forgoing crypto currencies such as stable coins that are tied to stable assets. Instead, payments are made with E-money, meaning "real money", on the blockchain. This is an absolute innovation in industry and a worldwide precedent, which should make it possible to scale this use case quickly. This is a big step for the use of blockchain technology in an industrial environment, especially for the autonomous processing of payment transactions. There is practically no effort for the companies, since the transactions take place on the block chain, but the bookings are made in the IBAN accounts by linking them to wallet addresses on the blockchain. An important advantage of this solution is the creation of programmable cash; in the case described it’s "euro on ledger".
Withdrawal of goods triggers payment
The industrial sensors in the silos measure the fill levels and store the inventory data on the block chain in an unchangeable, forgery-proof and thus audit-proof manner. A "proof of existence" is bindingly documented. Together with the electronic delivery note, "proof of delivery", it represents a sufficient and binding basis for the following autonomous payments. If the customer withdraws goods, the changed inventory triggers a transaction. The smart contract determines the amount of the transaction by calculating the value from quantities consumed and price. This type of autonomous settlement is also known as "pay per consumption" or "pay per use".
In the future, such applications with euro on ledger will be able to shorten payment cycles, improve cash flow, eliminate costly posting processes and release capital tied up in the supply chain in a sustainable way.