Blockchain Platform For Syndicated Loans Developed By Itaú Unibanco And Standard Chartered

Blockchain, News | December 4, 2018 By:

Brazilian bank Itaú Unibanco has partnered with British bank Standard Chartered to develop a blockchain platform for small syndicated loans.

In a joint statement, the banks claim that the blockchain platform is the first to go live in Latin America for so-called club loans, a type of syndicated loan provided by a small group of lenders. Itaú Unibanco reportedly raised $100 million with Standard Chartered and Wells Fargo & Co in a club loan to test the platform. The transaction was executed on a R3’s Corda blockchain platform.

Itaú’s treasury managing director Ricardo Nuno said that the banks negotiated all the loan terms through the blockchain platform, but did not transfer the money. However, he said the platform could do so in the future. He added that Itaú is also considering using the platform for client loans.

“The platform helped the banks cut legal costs and reduced the number of messages exchanged between the parties, usually around 2,000 e-mails,” Nuno said.

Germana Cruz, Standard Chartered’s head of financial institutions for Latin America, said the bank may use the trial in Brazil in new deals in Latin America.

While it’s too early to say if blockchain will revolutionize the banking industry, experts believe it will have a transformational impact. According to a study conducted by consulting firm Accenture, over half of all top managers admit that blockchain is going to play a key role in the success of financial companies in the near future. The study also found that the banking sector will save up to $20 billion by 2022 by implementing blockchain.