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BBVA uses Ethereum to complete a syndicated loan of 150 million euros



The transaction brought together several large banks and is the second major BBVA blockchain loan project this year.

One of the largest Spanish banks, Banco Bilbao Vizcaya Argentaria (BBVA), announced today, November 7, the completion of what it says is the first "blockchain syndicated loan agreement".

Although the announcement states: "This is the the first time a real deal was made, "the agreement apparently happened on the Ethnet testnet rather than on the mainnet.

The syndicated loan represents a sort of continuation of the previous blockchain experimentation by BBVA. In April, the bank announced it had completed a global corporate loan operation on the Ethereum testnet. The purpose of this pilot program was to verify how blockchain technology could increase the transparency, speed and efficiency of transactions.

This recently completed syndicated loan differs from the fact that, instead of involving only one lender, a syndicated loan allows various financial institutions to put money together and lend it to a single borrower.

The financial institutions that participated in the BBVA to complete this syndicated loan were Mitsubishi UFJ Financial Group (MUFG) based in Japan and BNP Paribas in France, which together with BBVA collectively loaned 150 million euros to Red Eléctrica Corporation, a Spanish national operator of electrical networks. Legal consultants Linklaters S.L.P. and Herbert Smith Freehills LLP would also have access to the blockchain platform.

Although BBVA not specifically state as the syndicated loan has been completed, the announcement outlines the phases involved in general. He says that blockchain technology allows each phase of a negotiation to be recorded along with the user codes and timestamps of when it was completed. All participants have access to the blockchain and "once the to contract is signed, a unique document identifier is registered in the Ethereum blockchain public network (in particular, in itsst network, & # 39; testnet & # 39;) to ensure its immutability against third parties while safeguarding your privacy at any time. "

In addition to using blockchain technology to complete different types of loans, BBVA is also one of the founding members of the Enterprise Ethereum Alliance. In May 2017, the bank became part of a non-profit initiative called Red Lyra. His intention was to develop open source blockchain platforms that could improve specific business practices for financial institutions, utilities and telecommunications service providers.


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