IKEA: World First Smart Contracts and Licensed E-Money Transaction

By Adrian Cruce

IKEA Iceland was recently involved in a commercial transaction with the use of Ethereum, licensed e-money and smart contracts. This was done in order to facilitate an order settlement with Nordic Store, a local retailer.

The transaction in questions was done on a Tradeshift-provided platform. Tradeshift is a supply chain management company. It used Monerium’s programmable digital cash. This was revealed by a Tradeshift announcement. Basically, Nordic Store bought some goods from IKEA Iceland. The retailer sent an e-invoice with the use of tokenized Icelandinc krona with the help of Monerium. Nordic Store settled it.

Tradeshift and Monerium said that the very first transaction of its kind shows the world that “government-regulated, programmable e-money is ready for mainstream markets.”

Monerium, which is based in Reykjavik, received its official license from FME (Financial Supervisory Authority of Iceland) and became the very first Electronic Money Institution in the country. The startup managed to receive approval from the authorities to offer fiat payment services with the use of blockchain systems.

Originally, the used Electronic Money Institution official rules were created by the EU for prepaid debit cards. This was necessary after the financial crisis of 2008.

Tradeshift co-founder, Gert Sylvest, said:

“With a ‘smart invoice’ we can issue tokens that represent the future cash flow down to each dollar on the invoice. Whoever holds tokens will get paid upon due date, which makes smart invoices ideal to use for financial-services apps.”

Tradeshift was also responsible for the creation of the smart invoice that was used in the transaction. The company was backed in a $250 million e-funding series by Goldman Sachs in May. We now see a firm round value of $1.1 billion.

IKEA Iceland CFO, Stefan Arnason, 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.”

Deals like the one presented here are very important for the development of blockchain technology as it proves the fact that the system can be used in real-world scenarios. It is also important for people to know more about cryptocurrencies.