Volvo Group Trials In-House Cryptocurrency for Supplier Payments

Volvo Group has been testing a proprietary cryptocurrency on a closed blockchain network to simplify transactions and data sharing with its material and transport suppliers.

The Purpose Behind the Experiment

Ivan Branco, head of information management, AI, and analytics at Volvo Group Trucks Operations, explained in a recent interview that the initiative is an internal exploration aimed at easing cross-border transactions while keeping tamper-proof records of orders and shipping data, without relying on traditional currencies. He described the project as an effort to build a closed environment using blockchain for transactions between material suppliers, transport suppliers, and Volvo itself, built around a crypto created specifically for that purpose.

Still in Early Stages

The initiative is part of wider efforts within Volvo Group, the division overseeing trucks, buses, and construction equipment, to explore how blockchain technology could improve supply chain efficiency. Branco confirmed the project remains at the ideation stage and has not yet moved into full industrial use.

Traceability and Regulatory Pressure

Volvo Group also sees blockchain playing a role in tracking products through their lifecycle, particularly for remanufacturing processes and upcoming European rules such as the Digital Product Passport. Branco pointed to ongoing difficulties tracking the country of origin for spare parts and assembled vehicles, an issue that can result in serious fines under sanctions and trade restrictions.

Sanctions Compliance as a Driving Factor

As an example, Branco referenced the Russia Ukraine conflict, when the European Union restricted shipments to Russia. Companies still needed to confirm whether goods were reaching Russia indirectly through importers who might resell parts, since liability could still fall on the original shipper even without direct involvement.

Challenges Ahead

Branco acknowledged that adopting blockchain technology brings its own set of difficulties, including added complexity when integrating with existing legacy systems, limited internal blockchain expertise, and ongoing concerns around scalability, maintenance, and long-term support.

While Volvo Group’s project has yet to move beyond early testing, its sister company, Volvo Cars, has used blockchain more extensively since 2019, primarily to trace cobalt sourcing in electric vehicle batteries.