Wall Street financial institution JPMorgan has filed for a patent for a DLT-based floor plan funding system.
According to a patent held by JPMorgan’s auto wholesale division, the bank is interested in developing a distributed ledger version of floor plan loans that will provide auto dealers with a revolving line of credit to borrow against inventory.
JPMorgan has launched a pilot using Quorum, the approved Ethereum-based blockchain. This system is currently being tested at various real dealerships.
The system uses the unique vehicle identification number (VIN) assigned to every automobile in the United States to check inventory levels at the dealership. In addition to improving risk management, the bank hopes the DLT-based system will prevent a practice known as a “double floor”.
According to a report from Coindesk, Christine Moy, the blockchain leader at JPMorgan, stated:
This is the case when a dealer can inadvertently (or fraudulently) pledge a vehicle to a bank as security for a floor plan, but can also pledge the same collateral for a different floor plan with another bank
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