During the week of Nov. 5, the first-ever loan between three countries was transmitted via blockchain. A total of $150 million in a syndicated loan for Red Eléctrica, the Spanish grid operator, was sent over a private blockchain network BBVA, which also worked with partners MUFG of Japan and BNP Paribas of France.
This marks an innovation in the development of blockchain, further refining the exchange of money through digital means. The timeline of the loan exchange was also time-stamped, showing a clear progression for just how quickly blockchain transactions are performed. The syndicated loan process can be done in a matter of days compared to the usual couple of weeks, and loan signing and documentation processing can be done in just a few minutes.
The blockchain network for this loan was protected with user codes, ensuring the transfer was secure and safe. BBVA not only proved using blockchain for syndicated loans saves time, it also reduced internal costs for clients. All the back-office operations were completed by the blockchain, speeding up the process and the need for tedious labor.
In many nations, governmental regulation of blockchain remains sparse if not nonexistent, and Spain has been working toward more secure blockchain structures throughout 2018. Now that Spain has successfully transferred a loan via blockchain, perhaps more innovations will occur in the near future.
Courtesy Christie Citranglo, Editorial Associate, National Association of Credit Management