Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
IKEA has completed the supply chain transaction which used e-money using smart contracts on the Ethereum blockchain and via the Tradeshift platform. The company views the transaction as pivotal for the sector.
IKEA, the world’s largest multinational furniture retailer based in the Netherlands, has successfully settled an invoice, receiving payment for goods bought by Iceland’s Nordic Store, using Monerium’s programmable digital cash. The initiation and completion of the transaction were carried out via Tradeshift – a global leader in the supply chain financial sector – on the Ethereum blockchain. The digital cash used in this transaction is a direct virtual form of the Icelandic official currency the Króna.
According to Tradeshift’s press release, the transaction represents a substantial improvement in the world of finance, especially as it relates to payment settlements in business. The announcement also states that Monerium is currently the first and only authorized firm that supplies e-money which is used for blockchains. Tradeshift now believes that properly regulated transactions carried out via “programmable e-money” has not only become a reality but is also ready for global mainstream adoption.
The co-founder and CEO of Monerium, Sveinn Valfells, described the transaction as advantageous to traditional transactions because it’s a lot more stable than other digital currencies. Valfells said:
“As the first company authorized to issue e-money on blockchains, we are delighted to demonstrate the benefits of blockchains for mainstream B2B transactions using a legal form of digital money. Unlike cryptocurrency which is volatile, e-money is a proven digital alternative to cash, regulated and redeemable on demand. Using programmable e-money in smart contracts heralds a new category of payments.”
The Monerium company along with Tradeshift, unsurprisingly have much bigger plans. Valfells goes ahead to mention the company’s intention to spread the e-money method of transactions firstly throughout Europe, and much later to other parts of the globe in all instances where cross-border payments are required. This is expected to improve the efficiency of international B2B supply chain transactions, making them multiple times faster and significantly cheaper than what is available today.
Co-founder of Tradeshift, Gert Sylvest, has also pointed out multiple benefits of the platform as advantageous to the creation of programmable financial services. According to Sylvest:
“If you sell the tokens back to the buyer, you basically have dynamic discounting. If you sell them off to a financier, you have Supply Chain Finance. If you use them as collateral in order to provide finance to sub-suppliers, you have what some call ‘Deep Tier Finance’ and what we call ‘Ecosystem Finance’.
You then avoid double-dipping finance fraud, which is when the supplier sells the same invoice two or more times, because now you can only sell a token once.”
The future of digital currencies has consistently been heralded by many cryptocurrency enthusiasts who believe they are inevitable in the future. Recently, popular Bitcoin bull and co-founder of Morgan Creek Digital, Anthony “Pomp” Pompliano, has called for the tokenization of the U.S. Dollar. Speaking on CNBC’s Squawk Box, Pomp posited that this is the only way the dollar can maintain its grand status in the already changing global financial clime.
Pomp also mentions how China’s forthcoming digital currency will give the country an edge, buttressing his point that the U.S. government must immediately tokenize the dollar. According to him, if China creates a digital currency and the U.S. doesn’t, then the Chinese currency will be a lot more globally accessible to people, than the dollar.