The applications of blockchain technology are numerous. This statement was again proved when the BBVA Bank of Spain became the first global bank to issue a loan using the distributed ledger technology.
What did BBVA do?
The distributed ledger technology or the blockchain technology is the one on which cryptocurrencies are based, and this technology has the potential to change the banking business completely.
According to BBVA, they carried out the process for a $ 91 million corporate loan. The entire process of negotiating the terms to signing the loan was done on a mutually distributed ledger that kept both the bank and the loan-seeker up to date on the loan’s progress. The system that has been used is based both on a private digital ledger and the public ethereum blockchain.
According to BBVA, use of the distributed ledger technology reduced the loan disbursal period from days to hours. BBVA has called it as a “significant advance in the exploitation of [distributed ledger] technology”. They believe that this technology can not only be used in banking but other sectors as well.
BBVA’s previous trysts with blockchain
The bank had already tested a blockchain solution for paperless trade transactions between Europe and Latin America. Furthermore, in October of last year, BBVA had used the blockchain technology to match the foreign exchange between itself and its Mexican subsidiary.
However, BBVA is not the only established financial institution that is looking to blockchain technology to streamline loan transactions. Two banking giants from Europe – Credit Suisse and Dutch Bank ING have also announced that they have completed a live $30 million securities lending transaction. This process was based on a blockchain application that is co-developed with enterprise blockchain consortium R3.