IKEA Accepts Digital Invoices on the Ethereum Blockchain
Enterprise-level supply chain payments manager Tradeshift, and Monerium, supposedly the world’s first and only authorized broker of licensed digital currencies for blockchain, announce a successfully completed transaction used between furniture giant IKEA and Icelandic retailer Nordic, which took place on the Ethereum blockchain.
More specifically Nordic used Tradeshift’s platform and Ethereum-based smart-contracts, to purchase goods from IKEA Iceland, settling a digital invoice enabled with Monerium’s programmable digital currency.
The accredited companies involved in the process showcase the fact that government-approved blockchain solutions for transferring value using digital means are not only possible, but are already happening, sparking the path for main adoption.
Co-founder of Tradeshift Gert Sylvest says that “Programmable money regulated by governments will become the foundation for e-commerce payments because they enable so-called ‘smart contracts.’ Smart contracts have many use cases. For example, they can be used to generate ‘Smart Invoices’, which are invoices that basically settle themselves,”
According to the report, the transaction is subject to predictions previously made by policy research firm Gartner, the International Monetary Fund (IMF), and the World Economic Forum (WEF).
What does licensed digital currency mean?
Monerium has received a government-backed license to issue and manage established currencies as electronic currencies, starting with the Icelandic Krona, earlier this year, and it is said to be able to support other currencies as well in the near future.
Sveinn Valfells, co-founder and CEO of Monerium stated that “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.”
It seems that Iceland has took a step forward, analogizing the global situation regarding cryptocurrencies, stablecoins, and government-backed digital currencies, and created a regulated gateway to such financial services through a licensed broker.
We’re not sure whether the program is meant to attract government-issued currencies that want to include a digital representation of their respective currency in their international presence or to demonstrate the power of blockchain technology, highlighting the benefits it offers to current market systems, but if IKEA can trust such as system publicly, it should be legit from all aspects.
Sylvest explained that if you sell the tokens back to the buyer, you get ‘dynamic discounting’, if you sell them to a financial broker, you get supply chain finance. Use them as collateral and you’re into ‘deep-tier finance’ or ‘ecosystem finance’.
Practically, the issued tokens are not just cryptocurrencies utilized in crypto exchange markets and p2p, but an interconnected vessel empowered to transfer, shift, and exchange monetary value in a transparent fashion.
In addition, Sylvest says that you can 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.
Now, this might be a standard for the crypto community, but it makes sense when a licensed firm tries to promote the benefits of decentralized distributed ledger systems to traditional financial brokers who are still skeptic of the benefits of such a network.
Stefán Árnason, CFO of IKEA Iceland, said “a programmable financial supply chain, where trading partners can connect information flows to money flows through smart contracts, will transform how suppliers and customers interact.”
I believe that similar services are available at IBM’s ‘blockchain services shop’, which has been utilized by Walmart, among other supply-chain focused businesses or R3’s Corda, which has been used by various central banks, including Bank of America, with the difference that Tradeshift and Monerium are offering crystal clear government-level specs when it comes to issuing and utilizing digital payments, smart-contracts, and automated invoicing.