BBVA deliver the world’s first blockchain-supported corporate loan
【Published by Jia Pei (加沛)】
As report by Financial Time, Spain’s BBVA has become the first global bank to issue a loan using the distributed ledger technology that underpins cryptocurrencies and has the potential to revolutionize banking processes.
BBVA addressed that they use blockchain distributed ledger technology to perform the entire process from conditional negotiation of loans to contract signing, including notifying banks and borrowers to all loan progress. Through the application of blockchain technology, the negotiation conditions can be synchronized and updated to the blockchain of both parties, and both borrowers and lenders can understand the loan progress. Indra, the Spanish IT consultancy, is the first company to use the BBVA blockchain corporate loan service. Indra borrows 75 million euros from BBVA. The loan that originally required several days of negotiation through blockchain technology can now be completed in just a few hours.
BBVA use the private chain to negotiate and complete the loan, then register the complete contract on the Ethereum’s public chain and interact with the public chain through the private and public chains to integrate innovation and disruptive technology into the solution. This includes the expansion of the application of digital innovations that are considered to be limited in application to loan financing, and the possibility of open and transparent contracts without any tampering.
BBVA hailed it as a “significant advance in the exploitation of [distributed ledger] technology” not just in banking but in the way private and public blockchains can interact. They use private chain to negotiate and complete the loan, then register the complete contract on to the Ethereum’s public chain. This includes the expansion of the application of digital innovations that are considered to be limited in application to loan financing. This is an example of how BBVA is incorporating the opportunities presented by blockchain technology to arm its key products with greater agility and transparency.
“Blockchain can offer clear advantages for all sides in the corporate loan market in terms of efficiency, transparency, security, it’s another strong example of how disruptive technology can be used to add value to financial services, something that is central to our strategy,” said Carlos Torres Vila, BBVA chief executive.
For its pilot project, BBVA used a private blockchain for the negotiation and completion process, and then registered the completed contract on Ethereum’s public blockchain. The bank, and its septuagenarian executive chairman Francisco González, has been a zealous adopter of new technology and business models, and has invested in a number of new ventures including the UK’s Atom Bank and German fintech solarisBank.
■ Source: blockcast.it
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