Despite a relatively harrowing price performance this year, Ethereum seems to be going mainstream.
Announced in a press release published on Tuesday, IKEA — yes, the home furnishing giant known for its dirt-cheap meatballs and “build it yourself” product lineup — has made use of the public blockchain to settle a transaction with an Icelandic company.
IKEA, Gone Blockchain
Per the release, an Icelandic branch of the Swedish furniture retailer has used “Tradeshift’s platform and smart contracts” built on the Ethereum blockchain to settle an invoice with Nordic Store, a more local retailer that purchased IKEA goods.
Interestingly, the transaction was not settled in Ether, but in “Monerium’s programmable digital cash.” Monerium is a fintech startup backed by Ethereum development studio ConsenSys. The upstart is notably the first electronic money institution that has been approved by the Financial Supervisory Authority of Iceland.
Although the details (specifically the size) of the transaction hasn’t become public information, those involved in this transaction believe that this Ethereum-based invoice settlement is a sign of things to come for digital payments.
“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,” said Monerium’s CEO, Sveinn Valfells.
The CEO of IKEA Iceland, echoed this excitement, remarking that a “programmable financial supply chain, where trading partners can connect information flows to money flows through smart contracts,” will hereby revolutionize how customers and their suppliers interact with one another.
It is important to note that while Monerium, TradeShift, Nordic Store, and IKEA were using Ethereum, their transaction was decisively not cryptocurrency-related (save for the transaction fees). Valfells said:
“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.”
Massive Firms Using Ethereum Tech
IKEA’s unexpected use of an Ethereum-based e-money smart contract system is the latest case of a massive corporation using the popular blockchain.
Just the other day, the Chicago-based financial services giant Morningstar, which deals with credit ratings and asset/market analysis, was revealed by Forbes to have begun delving into Ethereum.
As we reported on that matter, the American firm is looking to migrate some of its credit ratings business to a blockchain system through Ethereum smart contracts and oracles — programs used to bring off-chain data onto a blockchain. One proposed product will be to tokenize business debt, which will then be rated on-chain by Morningstar, giving investors more of a holistic look at a bond.
People have been asking for the transactions that we did to clear and settle the $20 million bond on the Ethereum mainnet.
— John W. 🇮🇪🇺🇸🇪🇸🇪🇺 (@_JohnWhelan) September 12, 2019
In the wake of the bond settlement, the company expressed its excitement about the pilot, specifically looking to how the blockchain-based system “reduced the number of intermediaries required in the process, making the transaction faster, more efficient and simpler.”
Santander, IKEA, and Morningstar using Ethereum is just the tip of the iceberg, however. Over recent months, some of the world’s largest technology and retail companies, not to mention some financial institutions, have started a foray into the use of blockchain, specifically Ethereum.
But as these companies are using Ethereum smart contracts, not Ether itself, it remains to be seen if corporations adopting the blockchain’s technology and smart contract system will have a positive effect on the cryptocurrency’s price.
But with increased demand for Ethereum blockchain processes should come an increased demand for Ether itself. That’s what Ether bulls want anyway.