Automated FX Transfers with JPMorgan's Kinexys

BMW AG has begun using a blockchain-based platform to automate part of its foreign exchange operations. The German carmaker is now relying on JPMorgan Chase & Co.’s Kinexys network for cash reserve transfers between its European and US accounts. The system automatically moves euros from BMW’s Frankfurt accounts to New York whenever its dollar balances fall below a preset level, reducing the need for manual intervention by treasury staff.

The blockchain-based setup will see transfers settled within seconds and operate 24 hours a day. Naveen Mallela, global co-head of Kinexys, told Bloomberg the platform’s speed and programmability will help BMW operate with less idle capital and reduce the need for additional buffers in case its US accounts fall short during periods of heavy spending.

Stefan Richmann, head of BMW Group treasury, stated that the programmability of the network was a decisive factor because transactions can be executed based on predefined conditions without manual intervention.

Kinexys, launched in 2019, currently handles approximately $5 billion in daily payment flows. While this is a relatively small amount compared to the roughly $10 trillion processed daily by JPMorgan’s payments division, the bank believes the blockchain-based network represents the future of automated financial infrastructure.

BMW's Growing Blockchain Interest and Initiatives

BMW’s adoption of Kinexys marks a significant development in its broader interest in blockchain systems for both financial and industrial operations. The company has been actively testing and deploying distributed ledger technology within its supply chain, a project that commenced in late 2019.

Approximately three years ago, the carmaker began utilizing blockchain in its purchasing processes to meticulously track the movement of components and raw materials across complex, multi-stage supply routes. Andreas Wendt, a former management board member responsible for Purchasing and Supplier Network, announced in 2020 that a successful pilot project for purchasing front lights in 2019 would be expanded to include a substantial number of other suppliers in the current year.

The automaker established the PartChain initiative to create a shared data layer accessible across its entire supplier ecosystem. This initiative reportedly provides "near-instant access" to historical data and certification records. Wendt emphasized that PartChain enables tamper-proof and consistently verifiable collection and transaction of data throughout their supply chain.

Two years later, around December 2022, the layer-2 cross-chain platform Coinweb announced a partnership with BMW to integrate blockchain-based tools into the automaker's operations in Thailand. According to a press statement from Coinweb, this collaboration was also intended to support a loyalty program built on a Software as a Service Web3 application. This system would allow BMW customers in Thailand to earn and redeem rewards through Binance’s BNB Chain, which was selected as the underlying network. Customers would accumulate rewards for various activities linked to their tier level and subsequently spend them on BMW products or services.

Leadership Transition at BMW Amidst Technological Advancements

The company's strategic expansion into blockchain systems coincides with significant leadership changes at BMW's executive level. On Tuesday, the supervisory board appointed Milan Nedeljkovic as the company's next chief executive officer, succeeding the long-serving CEO Oliver Zipse.

Nedeljkovic, who currently leads BMW’s production, is set to assume his new role on May 14 of the following year, with his mandate extending until 2031. The 56-year-old executive has been a dedicated member of BMW since 1993, beginning his career with the company as a trainee.

He has since held various positions at BMW locations across Germany and at the company's plant in Oxford, before joining the management board in 2019. Supervisory board chairman Nicolas Peter highlighted Nedeljkovic's reputation for effectively uniting teams and motivating them to achieve peak performance, qualities he deems crucial for continuing the BMW Group's successful trajectory during the current transformation phase.

The 61-year-old Zipse will depart by mutual agreement on May 13 of the following year, the scheduled date for BMW’s 2026 annual general meeting. Earlier this year, Airbus announced that Zipse might join its board of directors upon concluding his tenure at BMW. Peter acknowledged Zipse's leadership in navigating the company through the 2019 pandemic and steering the development of the "Neue Klasse," BMW’s next-generation vehicle platform.