Blockchain Alternative For Escrow Accounts Developed By Dutch Bank ABN AMRObr>
Dutch bank ABN AMRO will be offering a blockchain alternative to escrow accounts for money-management organizations that need to segregate and lock up client funds during the course of a transaction.
ABN AMRO said the new service will allow every individual client of a non-bank organization to get a bank account with the ABN AMRO Clearing Bank (AACB) via the blockchain. That way, fund flows between the organization and its clients are included in payment processes under regular supervision, guaranteeing the required transparency. It added that the blockchain solution would help reduce administrative costs for money-management organizations.
“Organizations that manage client funds include brokers, exchanges, pension funds, notaries, and product service providers,” the bank said. “Clients transfer money to these organizations to be used for investments or payments. Since these organizations do not have a banking licence, they have been forced to use escrow accounts – to date, that is. From now on, these organizations can offer their clients individual accounts with AACB through the blockchain.”
Nxchange, a stock exchange for direct trading in securities between companies and investors, is the first client to launch this solution, starting in February. Using the platform, these companies and institutions can collect capital directly from their own websites, offering investors a regulated equity and bond trading environment.
“We can’t wait to get started on this cooperation,” said Nxchange CEO Marleen Evertsz. “The solution simplifies the way investors can invest in businesses and other issuers. Blockchain technology also offers a wider future perspective to facilitate transactions in multiple asset categories in distributed networks.”
“Nxchange is the ideal party to be starting this innovation with,” said AACB’s Jan Bart de Boer. “They’re innovators themselves; their business model is geared toward efficiency and transparency. The next step is to jointly check and assess the new functionality and to make improvements where necessary. After that, the service can be made more widely available. We’re seeing a great deal of market interest for this service.”