Volvo is testing the use of an in-house cryptocurrency to speed up transactions and simplify administrative processes in its global supply chain. The work focuses on conducting transactions between material suppliers, transportation companies and Volvo through a closed blockchain system.
A closed transaction network can be established
Ivan Branco, who manages information management, artificial intelligence and analytics studies in Volvo Group Belgium’s logistics operations, announced that the company is examining blockchain technology to reduce inefficiencies in the supply chain.
Branco said Volvo is exploring with some transportation companies whether a closed trading environment could be set up that only designated participants can access. In the planned structure, transactions between material suppliers, transportation companies and Volvo will be recorded through the same system.
Volvo is evaluating the possibility of conducting transactions between material suppliers, transport companies and its own units in a closed blockchain environment.
In-house cryptocurrency could simplify transactions
Volvo is also testing whether it can reduce the complexity of supply chain-related procedures by using its own cryptocurrency in the system to be created. Details on how the in-house asset will be used to make payments or record transactions between parties have not yet been disclosed.
Branco said one of the main obstacles to the widespread adoption of blockchain technology is that this technology is associated only with cryptocurrency speculation. Volvo’s work focuses on the use of blockchain in corporate transactions and logistics processes.
The fact that blockchain is associated only with speculative cryptocurrency transactions is seen as one of the important obstacles that make it difficult for companies to adopt the technology.
Volvo Group examines global logistics network
Sweden-based Volvo Group operates in the fields of trucks, buses, construction equipment and marine and industrial engines. Due to its production and logistics operations in numerous countries, the company manages a dense network of transactions between suppliers and transportation partners.
The results of the tests will determine whether the in-house cryptocurrency or closed blockchain network will be used in real operations. Volvo Group has not yet shared a detailed schedule about the scope of the application, its technical infrastructure and possible launch date.
