The R3 CEV blockchain consortium has a new member that’s not like the others.
Last week, Toyota Financial Services announced it has joined R3’s consortium to explore distributed and shared ledger tech for potential applications in auto financing. TFS is the first captive to collaborate with the more than 50 of the largest FIs in R3’s network on developing use cases for blockchain in financial industry.
Chris Ballinger, the captive’s CFO and global chief officer of strategic innovation, was at the forefront of the deal, saying that blockchain “will ultimately lower costs, increase efficiency, and make auto finance more transparent.”
At some point in the future, cars will all run on blockchain rails, “driving around” within the autonomous and shared infrastructure, Ballinger said at the inaugural Auto Finance Innovation conference in May.
We can all agree, that’s the future, some are just disagreeing on the timing of it. However, financing products for those markets have not been developed yet. You just see little experiments, and I think that’s big change and the big opportunity for auto finance. It’s a big market, huge, and question is how do we finance it, and make it affordable.
And TFS has been hard at work bringing car financing to the age of rideshare and mobility. The captive partnered with Uber in May, to create new flexible leasing options for car purchasers to cover their lease payments through earnings generated as Uber drivers.
TFS is not alone in seeing potential blockchain applications in car financing. Arcade City, a decentralized rideshare that runs on Ethereum, is looking at potential partnerships in the OEM space to offer flexible leases that also run on blockchain. “We have already had productive conversations with two major OEMs,” founder Christopher David told Bank Innovation. “But we are looking at it a bit differently than Uber and Lyft. We will be doing a token sale instead of an equity round, and we already have a VC arm of a major manufacturer interested to participate in the sale.”
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