The wholesale car financing arm of JPMorgan Chase is putting together a plan to finance the creation of a blockchain-based automobile inventory system, The BlockCrypto reported on Friday (Nov. 22).
The inventory system would digitize floor plan financing using the company’s patent-pending ledger-based floor planning methods. The plan also aims to bring greater efficiency to the commercial lending process.
Floor plan lending is a revolving line of credit that lets car dealers borrow against retail inventory. It attaches a car’s vehicle identification number (VIN) to a blockchain and uses telematic and geolocation sensors for real-time identification of inventory on the dealership floor.
“There is the ability to register this unique identifier onto a shared blockchain registry shared by auto manufacturers, finance banks and companies, and dealerships to enable easier tracking and association with floor plan contracts and key attributes related to collateral audit like GPS location,” JPMorgan told The Block.
Currently, the only way to collect data and verify inventory is to have someone physically check a dealer’s lot. Chase’s new DLT application is billed as a “more efficient alternative.” It can also prevent “double flooring,” which is when the same vehicle is used as collateral for more than one bank.
The pilot program to test the solution was successful, Christine Moy, JPMorgan’s blockchain lead, told the news outlet. She added that the company is negotiating with carmakers to build the technology into all new vehicles.
The Quorum blockchain is a private variant of Ethereum developed by JPMorgan that was previously used for abstract financial operations.
The automotive world and the associated culture is undergoing a massive, historic change and a shift in consumer preferences stemming from digital and mobile technology. Cars and trucks are becoming rolling centers of commerce and payments, as ridesharing and other programs are changing the concept of what it means to be a driver, rider and user of transportation in general.
