Volvo Group pilots closed-chain token for supplier payments

Volvo Group tested a proprietary digital token on a closed, permissioned blockchain to streamline payments and record orders and transport data between material suppliers, transport partners and the company. The pilots remain at the ideation stage and have not been moved into production.

The company ran limited pilot explorations with selected transport suppliers to examine a permissioned ledger and a purpose-built token for transactions and shipment records. The network was designed so only verified participants could join.

The pilots aimed to simplify settlement processes and create immutable records of orders and movements that authorised parties within the network could verify. The token was intended for use only inside the permissioned network and not as a general-purpose currency.

Volvo Group positioned the work as part of efforts to improve supply-chain visibility and traceability, including remanufacturing and compliance with forthcoming European rules such as the Digital Product Passport. The company cited difficulties tracking country of origin for spare parts and assembled vehicles, which can create legal and commercial risk.

Representatives highlighted the Russia-Ukraine conflict as an example where firms need precise origin and destination data to avoid breaching sanctions or export controls and to limit liability if goods are redirected by intermediaries.

The pilots identified several challenges that prevented a wider rollout. Integrating blockchain functions with legacy enterprise systems adds technical complexity. Many suppliers lack blockchain experience. Scalability, ongoing maintenance and support for a private ledger and token system, and the need for common standards among partners were also raised as hurdles.

Volvo Group's broader organisation has prior blockchain experience. Volvo Cars has used blockchain since 2019 to trace cobalt in electric-vehicle batteries, a use case tied to materials sourcing and regulatory transparency.

Ivan Branco, head of Information Management, AI and Analytics at Volvo Group Trucks Operations, described the pilots in a recent interview: ‘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.' He also noted: ‘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.'

For now, Volvo Group has described the project as exploratory work intended to test practical benefits and technical limitations rather than an operational change across its supply chain.