BBVA Issues Loan Through Blockchain
BBVA from Spain is the latest bank to use blockchain in issuing loans. The technology is known to reduce time and costs.
BBVA Partners With Other Banks To Release Syndicated Loans
Spanish Bank, BBVA has successfully cleared a pilot project that puts a controlled loan for $150 million on the open ledger. An article run by the Financial Times indicates that the loan was meant for Red Electrica. The entity is the operator of the Spanish national power grid.
Under the loan, several banks were required to contribute money towards a sole borrower. BBVA partnered with Mitsubishi UFJ from Japan and BNP Paribas from France. Before releasing the loan via the ethereum blockchain, all the banks approved the transaction. The entire process was stamped based on time. The ethereum blockchain was used as a means of ensuring that the loan remains authentic.
Traditionally, syndicated loans mean that banks will have to depend on faxes as a way of sharing data. This process is time-consuming and expensive. With the inception of blockchain technology, banks can share the information in real time. Time taken is reduced to about two days down from weeks.
Further reports indicate that BBVA is in the process of carrying out additional blockchain trial projects for syndicated loans. Notably, the bank has already been involved in the blockchain industry before. Early this year, BBVA successfully issued a $91 million loan through a private ledger and ethereum blockchain.