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$150 Million Syndicate loan put on the Ethereum Blockchain by BBVA


A $150 million dollar syndicate loan has been placed on the Ethereum blockchain by Spain’s largest Bank, BBVA. BBVA has over $800 billion in assets making it the dominant Spanish banking force. It comes as no surprise the dominant bank is looking to pioneer Spain’s blockchain banking future.

In a report released by FinExtra on November 7th, the syndicate loan is for Red Electrica, the national Spanish electric grid operator.

What is a Syndicate Loan?

If you don’t know what a syndicated loan is, it’s a loan where multiple banks band together to lend to a single borrower. BBVA’s co-lenders for this loan are the French banking group BNP Paribas, and Japan’s bank holding Mitsubishi UFJ Financial Group (MUFG).

Syndicated loans in the past have been extremely time consuming and pain staking processes. All sensitive information for syndicated loans have been traditionally transferred through faxes, which is an expensive and slow process. Blockchain technology helps to expedite this process as well and making information even more secure than faxing. With blockchain, banks are able to share sensitive information in a matter of seconds, making the process of  securing the loan only a couple days versus weeks.

BBVA & Blockchain Tech

The syndicated agreement contract has been recorded on the Ethereum public blockchain. Each step along the way was recorded on the Hyperledger technology-based network. According to Finextra, contract signatures were placed on the blockchain to act as unique document identifiers to preserve the loans ‘authenticity’.

Ricardo Laiseca, BBVA’s head of global finance, commented that the bank’s recent blockchain-related initiative is part of the company’s attempt to provide clients with “the most innovative financing solutions.”

BBVA reportedly plans to continue exploring blockchain banking possibilities, and pioneering the revolution of the banking world.

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