Merck, PwC Germany and The Hashgraph Group have launched a pilot project built on the Hedera blockchain to improve cocoa traceability, at a time when companies face mounting regulatory pressure to provide verifiable information about the origin and production of raw materials.

The initiative arrives ahead of new European Union requirements scheduled to take effect on Dec. 30, 2026. Under the EU Deforestation Regulation, businesses will have to demonstrate that cocoa and other covered commodities — including cattle, wood, soy, palm oil, coffee and rubber — are deforestation-free and legally produced, and provide geolocation data on the plots of land where they were sourced. Violations could bring substantial financial penalties, raising the pressure on supply-chain operators to establish reliable systems for collecting and verifying product data.

The pilot combines blockchain-based digital product passports, physical product authentication, and business-process expertise to create a verifiable record that links cocoa batches to their origins and compliance histories.

Cocoa supply chains are especially difficult to monitor. Millions of farms, largely in Africa — Côte d'Ivoire, Ghana and other West African countries account for the bulk of global cocoa production — sell cocoa through networks of intermediaries before the commodity reaches processors and retailers. That complexity can make it hard to establish where individual batches originated and whether they were produced in compliance with environmental and labor requirements.

A Digital Identity for Every Cocoa Batch

The Hashgraph Group is supplying its TrackTrace Digital Product Passport platform, which creates a digital identity for each cocoa batch. The system records information such as origin, quality, certifications and compliance documentation on the Hedera blockchain, a public distributed ledger governed by a council of global enterprises rather than by miners or a single company.

Merck contributes its M-Trust technology, which uses physical authentication methods to verify products or packaging and connect them with corresponding digital records. PwC Germany supports the initiative by helping companies put in place the business processes, governance frameworks, training programs and implementation strategies needed for wider adoption.

Together, the combined system creates a digital twin for each product unit. Authentication events can be recorded at predefined points through scans or system inputs. M-Trust verifies the physical authenticity of the material or packaging, TrackTrace organizes the associated information, and Hedera provides an immutable record of transactions and events.

As cocoa moves from harvesting through processing and distribution, its digital passport can be updated with additional information covering its identity, origin, quality, certifications and due diligence records. Authorized participants can use this information to establish a chain of evidence, while consumers could access selected product information through QR codes or compatible scanning systems.

Announcing the project on X, The Hashgraph Group (@hashgraphgroup) wrote on June 9, 2026:

The Hashgraph Group and @merckgroup are extending TrackTrace, our Hedera-based Digital Product Passport platform, with Merck's M-Trust authentication technology. As the EU introduces Digital Product Passports from 2026, companies must prove where a product comes from, and that… pic.twitter.com/hOqgsfpeLo

— The Hashgraph Group (@hashgraphgroup) June 9, 2026

Supporting EU Compliance and Supply-Chain Management

The solution is designed to help businesses prepare for the EU Deforestation Regulation as well as Digital Product Passport requirements under the Ecodesign for Sustainable Products Regulation. By connecting cocoa products with origin, authentication and compliance records, companies can build evidence showing that materials were legally produced and meet applicable deforestation requirements.

For producers, manufacturers and brands, the system could reduce manual data reconciliation and improve preparedness for regulatory audits. It could also allow companies to identify affected batches more quickly during recalls, quality investigations or compliance reviews.

The architecture is designed to extend beyond cocoa into industries such as food, pharmaceuticals, luxury goods, electronics and industrial components, where authenticity, origin and regulatory compliance are critical.

The companies noted that successful deployment would depend not only on blockchain infrastructure but also on operational factors including stakeholder onboarding, employee training, data governance and change management. One open question for blockchain-based traceability projects is how far they can reach upstream to smallholder farms, where digital tools and connectivity are limited.

Stefan Deiss, chief executive and co-founder of The Hashgraph Group, said the integration was intended to move supply-chain verification beyond fragmented documentation and self-reported information. Thomas Endress, executive director and head of M-Trust at Merck, emphasized that digital traceability becomes more effective when blockchain records are connected to evidence from physical products. Husen Kapasi, enterprise blockchain lead at PwC Germany, said the approach could preserve the compliance and quality history of raw materials alongside information about finished products, potentially making recalls and investigations more targeted.

The pilot represents an effort to combine physical authentication with blockchain records to create a more transparent and auditable supply chain, with cocoa serving as the first potential use case for a broader traceability model. If expanded successfully, the system could provide companies with a standardized method for managing product-origin information while giving regulators, supply-chain participants and consumers greater access to verifiable evidence.