Banco Bilbao Vizcaya Argentaria (BBVA), one of the largest banks in Spain has successfully issued a €150 million loan using Blockchain Technology. The money was given to Porsche Holding, a major car distributor in Europe. According to the bank, the decentralized platform was used because of its speedy nature which ensures that transactions are completed on time.
Bank Issues Loans to Client Using the Blockchain Platform
The financial institution has been issuing loans to companies using the Blockchain platform. But this time, the borrower is an international company since they are not based in Spain. BBVA had used its Blockchain technology in the past, to give out loans of $150 million and €100 million. The borrowers were Red Eléctrica de España (REE), Spanish national electrical grid operator and ACS, a Spanish engineering firm.
Like the others, the Bank also used its private and public blockchain technology to transact with Porsche Holding. It can be assumed that the Ethereum Blockchain was used due to the fact that this was the case when the financial institution had transacted with Red Eléctrica de España.
Blockchain Used Meaningfully to Improve Client’s Experience
Frank Hoefnagels, head of BBVA CIB in Germany commented on the nature of the business. He said that they have the objective of improving the level of services offered to their clients. Therefore, they were applying Blockchain technology in a meaningful way that will improve the client’s experience.
Frank also noted the relevance of speed when it comes to financial transactions that need to be completed on time. This is what they were able to achieve with the use of the Distributed Ledger Technology (DLT). Moreover, the transaction was carried out on a secure platform and the details of the proceedings are traceable.
Financial Institutions are Adopting Blockchain Technology
On December 5, two Banks in Latin America, Itaú Unibanco Holding SA, and Standard Chartered developed a Blockchain-based platform for loans. The platform will be used to issue club loans to individuals and companies. The companies revealed that Blockchain was chosen because of its security, transparency, and ability to help them reduce legal cost.
In a recent report, we also revealed that an Australian company is now receiving cryptocurrencies as a collateral for loans. These are loans that issued on the same day they are applied for, and the borrower can pay their collateral using Bitcoin, Ethereum and other digital assets. This is the first of its kind and there are expectations that in future, more banks will incorporate Blockchain technology into their processes.