BBVA used a private blockchain network to arrange a $150m syndicated loan for Red Eléctrica de España, the Spanish grid operator, with co-lenders MUFG of Japan and BNP Paribas of France.
Legal advisers Linklaters and Herbert Smith Freehills also had access to the system which allowed all parties to exchange information instantly. The information was time-stamped, to show exactly when each event occurred, and the network was secured with user codes. Once the contract was signed, it was given a unique identifier that was recorded on the Ethereum blockchain, preserving its authenticity.
BBVA says the blockchain, which is being rolled out on a pilot basis, simplifies and speeds up the process of completing syndicated loans from about two weeks to a day or two. Loan signing and documentation processing, which traditionally takes a few hours, can be done in minutes.
Another platform built by fintech group Finastra and pioneered by the UK’s NatWest is offering syndicated loan servicing over blockchain, using the Corda distributed ledger technology.
The banking industry’s single largest blockchain project remains the Interbank Information Network, where more than 75 banks led by JPMorgan, Royal Bank of Canada and ANZ are using distributed ledger technology for some interbank payments.