As cryptocurrencies have gained momentum, more concerns arose in the banking sphere. The popularity of cyber money, as lots of experts have said, could swipe away banking systems all over the world or at least put them into danger.
The peer-to-peer nature of crypto-remittances may indeed leave bank workers jobless, so the only option for banks is either to adapt to the challenges. And one of the ways is to play in accordance with crypto-rules – by relying on the blockchain.
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BBVA – Spanish second-largest lender – claims to be the first international financial institution to register a loan using blockchain. Moreover, the bank finalized a pilot of the total issuance process not on one blockchain but two of them.
Spain Stepping Forward in The Blockchain-Adoption Rally
As per Financial Times, the Spanish BBVA has been examining and setting off blockchain apps in the heart of banking processes since. And now the investment titan in Spain has created a pilot which comprises the whole process of allotting a corporate credit. The loan is no more and no less than $91 million. And, as it has already been said, the issuance can be performed on two various blockchains.
The claimed benefit of applying blockchain technology to the banking procedures is the unprecedented acceleration of the processes. The loan consultation process, according to BBVA, was shortened from ‘days to hours’ thanks to the blockchain.
Two In One
The institution also revealed that it used two distinct blockchains for separate purposes. The first one – a private blockchain – the bank applied for issuing and finalizing the loan. The second one – the public Ethereum-blockchain – the lender utilized for registering the finalized contract for permanence.
The Spanish bank stressed that its pilot was indeed successful. Furthermore, the institution called is considerable progress in the use of blockchain tech trend whereby both private and public blockchains were involved into the process and could interact in the frames of the banking space and outside of it.
It is remarkable that in the private blockchain there weren’t used many details. However, FT emphasized that both the lender’s and the borrower’s negotiating conditions were recorded at the same time as well as updated on the reciprocal blockchain. This part is advantageous for both parties as long as it allows them to stay abreast of all the loan’s advancements.
BBVA Saw Undeniable Advantages in The Blockchain Application
As of the issue, the BBVA top exec Carlos Torres Vila said that blockchain is capable of proposing explicit benefits in the corporate loan ecosystem. And it is so due to:
Vila concluded that the last implementation of blockchain by the bank shows how DLT can be used to make financial services more effective, despite the fact that it is disruptive.
The last application of blockchain by the Spanish bank BBVA is not the only time when it dealt with the realm of cryptos. Previously, the lender used the blockchain of the cyber startup Ripple in a pilot between Spain and Mexico which included the transfer of “real-world” funds.
Just within seconds there were remitted 50 payments dominated by euro, which in usual conditions it takes around four days to transfer the same sums.
Then, it was clients who benefited from the practice as long as with the help of the blockchain the bank could offer them transparency in expenditures as well as access to payment status within the entire process.
The chief of cyber transformation in investment banking at BBVA – Alicia Pertusa – named this experience a “pioneer initiative.” Also, she added that such advancements, brought in by emerging tech trends, can change the client experience by making it more “transnational.”