Volvo Group tests proprietary cryptocurrency for supplier transactions in blockchain push

Volvo Group has explored using a proprietary cryptocurrency on a closed blockchain network to streamline transactions and data exchange with material and transport suppliers.

Ivan Branco, Head of Information Management, AI, and Analytics at Volvo Group Trucks Operations, said in a recent interview with the Cardano Foundation that the initiative was an internal exploration aimed at simplifying cross-border exchanges and maintaining immutable records of orders and transportation data, independent of traditional currencies.

“We have done explorations also with certain transport suppliers to see if we could create, let’s say, an enclosed environment using blockchain for the transactions in between material supplier, transport supplier, and ourselves with a proprietary cryptocurrency that we created for that specific purpose,” Branco said.

It is part of broader efforts by Volvo Group — the division responsible for trucks, buses, and construction equipment — to explore blockchain for improving supply chain efficiency.

End-to-end traceability

Volvo Group sees potential blockchain applications in product traceability, particularly for remanufacturing, and upcoming European regulations such as the Digital Product Passport.

Branco highlighted persistent issues with country-of-origin tracking for spare parts and assembled vehicles, which can lead to significant fines under geopolitical sanctions and trade restrictions. 

"When you had the Russia-Ukraine situation where the European Union said you don't ship any more goods towards Russia, you need to know if the goods are getting to Russia, for example, because you're sending them to importers who might then resell those parts and you're still liable," Branco explained.

Branco acknowledged that adoption of blockchain has its own challenges, including added complexity to legacy systems, limited blockchain literacy, scalability, maintenance, and support.

While Volvo Group's project remains in the ideation stage and has not been industrialized, its sister company, Volvo Cars, has implemented blockchain more extensively since 2019, particularly for tracing cobalt in electric vehicle batteries.