BBVA Signs $150M Blockchain Syndicated Loan Arrangement With Red Eléctrica

Blockchain, News | November 8, 2018 By:

Spanish banking group Banco Bilbao Vizcaya Argentaria (BBVA) has successfully completed a $150 million syndicated loan transaction using blockchain technology.

The syndicated loan transaction was conducted on a private blockchain network through which six entities participated in the process. BBVA granted the loan alongside Japanese bank MUFG and French banking group BNP Paribas to Red Electrica, a corporation which operates Spain’s national electricity grid. UK-based law firms Linklaters and Herbert Smith Freehill also participated in the transaction.

Each step of the negotiation leading to the signing of the final agreement was recorded in a Hyperledger-based blockchain network along with a user code and the timestamp. The blockchain network allowed all the participating entities to track the progress of the negotiation and its status. Once the contract was signed, a unique document identifier is recorded in ethereum’s public blockchain network. This guarantees document’s immutability against third parties while safeguarding its confidentiality at all times.

BBVA said that the use of blockchain in this transaction has greatly increased transparency and speed, while equally improving efficiency.

“BBVA is simplifying the processes related to corporate financing and is betting on the use of new technologies, like blockchain, to digitize loan negotiations and contracting,” said Ricardo Laiseca, Head of Global Finance at BBVA. “We work with our corporate clients to be able to provide them with the most innovative financing solutions.”

Teresa Quirós, CFO of Red Eléctrica, said that they have been exploring new technologies that would enable them to address the challenges that the changing energy environment represents to their company.

“This transaction is part of the our company’s initiative to push digital transformation and innovation as levers for growth and efficiency,” Quirós said.