Spanish banking giant BBVA has become the first global bank to use the blockchain technology to issue a corporate loan.
The loan was worth $75 million, and BBVA used the distributed ledger technology at all stages of the process, starting from negotiating terms to signing the loan, and then registered the completed contract on Ethereum’s public blockchain.
BBVA gave very positive feedback about the experience, saying that it helped reduce negotiation time from days to hours. They went on to say that it is going to introduce the use of blockchain in such areas as international payments, international trade and foreign exchange.
BBVA is known for its passion for new technologies. It has already invested in Atom Bank, the UK's first app-based lender, and German fintech SolarisBank, which offers a completely digital banking platform to which other businesses can connect in order to offer financial services themselves.
Blockchain is expected to revolutionize the financial industry. It is seen as beneficial for adoption in such areas of banking as payments, clearing and settlement, trade finance, identity and lending. Among blockchain’s advantages for banking is that it can considerably reduce the time needed for transactions, as all changes and updates are immediately visible to all parties.