Banking News

Spanish bank BBVA issues corporate debt on blockchain

Debt and credit street sign

Today Spanish banking group BBVA announced the completion of the first global corporate loan transaction for €75m using blockchain technology. Blockchain was used from the negotiation stage through to the signing.

BBVA developed the pilot in-house with consulting company Indra’s Minsait business unit representing the borrower.

Currently, the process for issuing corporate loans involves many iterations and interactions between the client and bank. The new method allowed for far greater transparency. Both Indra and BBVA able to review the status at every stage of the transaction. Additionally, the digitization of the negotiation process reduced the management time from days to hours.

Earlier in the week, JP Morgan conducted a blockchain issue of a Certificate of Deposit for the National Bank of Canada.

Technology

The negotiation and completion process was transacted on a private blockchain powered by Hyperledger Fabric. After agreeing to the contract, they registered a hash or unique identifier of the transaction onto the Ethereum public blockchain, or rather the testnet version. The purpose of this latter step was to guarantee the immutability of the agreed contract.

“BBVA is involving its clients in project processes such as requirements definition, development, and implementation. In this way, BBVA provides its customers with not only the best financial solutions but also the most advanced technical and innovative capabilities,” said Ricardo Laiseca, BBVA’s Head of Global Finance for Corporate and Investment Banking.

BBVA is a member of all three major blockchain technology alliances: Hyperledger, R3 and the Ethereum Enterprise Alliance. The company is also developing separate blockchain initiatives related to international payments, international trade, and foreign exchange transactions.