Spain’s second-argent banking lender – Banco Bilbao Vizcaya Argentaria (BBVA) has now become the first banking institution to issue a loan to one of its corporate clients, entirely using the blockchain technology.
As reported by Financial Times, the loan worth €75 million ($91.33 million) was issued with the entire process of the loan, from negotiations to the signing of the loan documents was done using a mutual distributed ledger. Both the parties could thereby see all the intermediate process through the entire loan disbursement process.
BBVA said that the use of the blockchain technology had reduced the negotiation time from days to hours. The bank calls this process “significant advance in the exploitation of [distributed ledger] technology”.
Carlos Torres Vila, CEO of BBVA said:
“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.”
He also said that apart from this pilot project with Spain’s telecom giant Indra, the bank also has “several more transactions in the immediate pipeline”.
Indra’s Director of Financial Services Borja Ochoa said that blockchain was “destined to become one of the technologies that will change the way we interact with products and financial services” and that the pilot “strengthens the position of BBVA and Indra as leaders in the practical application of blockchain technologies”.
This is not for the first time that BBVA has been using the blockchain technology for its products or services. Last year, the bank used DLT for a paperless trade transaction between Spain and Latin America. Also, in October 2017, the bank used the blockchain technology in order to match foreign exchange between itself and a Mexican subsidiary.