The Toyota Financial Services unit of Toyota Motor Corp. plans to launch tests this year of blockchain distributed ledgers, for both financial and nonfinancial applications.

The finance arm of the carmaker sees potential for blockchain, best known as the ledger that supports Bitcoin digital currency, for systems other than settling monetary transactions, said Chris Ballinger, CFO and head of strategic innovation at Toyota Financial Services.

Chris Ballinger, CFO and head of strategic innovation at Toyota Financial Services Photo: Toyota Financial Services

To jumpstart Toyota’s blockchain tests, the company said Thursday it had joined R3 CEV, a consortium of companies working on blockchain technologies. The company is one of a few outside of banking to join R3.

The online distributed ledger, which makes it easier for participants to track the ownership of an asset, could be applied to track auto parts as they move between countries and factories, he said. Down the road, blockchain could play a role enabling connected cars to communicate with drivers’ personal devices and sensors on infrastructure in cities and on roads. “That’s fairly far out and extremely speculative,” he said, “But it’s important to get your toe in the water.”

Keeping more accurate records in real-time of the thousands of parts that go into building a typical car would make Toyota more efficient, he said. Such monitoring could also help during supply chain disruptions. “If you have a tsunami and part of your supply chain is knocked out, as happened a few years ago, you have better info about where parts are,” he said, referring to the earthquake and subsequent tsunami that struck Japan in 2011. Toyota temporarily shut two factories in the aftermath.

Toyota seeks access through R3 to companies further along in testing the technology and building related software, Mr. Ballinger said. R3, whose members include Goldman Sachs Group Inc. and Morgan Stanley, recently concluded a major test of technology from five blockchain and three cloud providers, to see how different combinations handled simulated transactions in commercial paper. They did not release results but said the findings would help R3 members in establishing technology guidance for CIOs in this emerging area.