Credit Suisse Consortium Moves Forward on Loan Blockchain

Blockchain, FinTech, Innovation, Investing, News | August 21, 2017 By:

A new platform for syndicated loans is being created by a banking consortium led by Credit Suisse. The project is now in its construction phase and anticipates a test beginning next year.

Emmanuel Aidoo, a director and the head of emerging technology in the global markets of Credit Suisse, told EuroMoney that the commercial platform will use smart contracts to achieve its goals. “We are working to put a few dozen smaller loan transactions, where we or other participating banks are the agent, onto a distributed ledger platform using smart contracts in production next year,” he said.

The overall project will create a blockchain where multiple lenders pool capital for individual borrowers. The blockchain would reduce paperwork, save time, and reduce costs in processing loans.

“Many investors, including mutual funds and institutional asset managers, might be attracted to loans that are senior to bonds in the capital structure, but they are put off by how long loan trades take to settle,” Aidoo said.