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BBVA, the second largest bank in Spain, has officially closed a loan worth $ 170 million using blockchain technology.
Banco Bilbao Vizcaya Argentaria (BBVA) reported on December 14 that the multimillion-dollar loan between the bank and Porsche Holding Salzburg, Europe's largest car dealer, was to help the subsidiary Volkswagen make strategic purchases in the retail distribution markets in Europe and Asia.
According to the news, the acquisition loan represents the first line of credit of BBVA which provides for the completion of a non-Spanish borrower on the blockchain.
But this is not the first time that BBVA uses the nascent blockchain technology to facilitate loans, having so far successfully managed blockchain-based loans with several corporate clients in Spain.
In November, the bank organized a syndicated loan of $ 150 million on behalf of Red Eléctrica de España (REE), a state-owned national network operator.
And another loan agreement still in the nascent technology involved the engineering company ACS, with which the Spanish bank accepted a bilateral corporate loan of 100 million euros.
As with Finextra, the bank's agreement with Porsche Holdings uses the same blockchain technology used by BBVA in all of its other transactions.
In the recent loan agreement, as with the previous ones, the bank used a mix of both public and private blockchain technology.
BBVA, together with BNP Paribas and the largest Japanese banking institution MUFG, jointly facilitated the loan agreement with REE using a private Hyperledger network and the public blocker Ethereum (ETH), with the latter being used to register the unique identifier of the document (document ID) for the loan contract.
BBVA's head of the commercial and institutional banking sector in Germany, Frank Hoefnagels, said that the blockchain proved to be extremely important when a bank like them wants to complete the financial acquisition operations because, for such operations, speed matters a lot.
He added that the Porsche Holdings transaction was mainly geared towards "putting blockchain technology into meaningful practice", as the bank interacts with its customers.
"Our goal is to improve customer experience by simplifying processes and increasing execution speed."
The bank has also tried to use technology because it helps ensure traceability; while its immutability guarantees that the documentation process during the transactions remains transparent and therefore offers greater security.
The Spanish banking giant has made several acquisitions in blockchain since it announced in April, which had become the first bank to successfully issue a loan on the blockchain. As the last adventure, the pioneering agreement of BBVA has also combined a public-private partnership.
BBVA stated that it would be using the blockchain to automate the negotiation processes of the institution and reduce operational risks. The bank also wants to develop a do-it-yourself (do-it-yourself) tool designed to serve its corporate and business customers.
BBVA, together with the largest Spanish bank Banco Santander, is among the global banking giants that have signed partnerships to use Ripple technology.
(Source: Banco Bilbao Vizcaya Argentaria)
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