Spanish Bank BBVA Issues $40M Structured Green Bond Using Blockchain

Blockchain, Innovation, News | February 20, 2019 By:

Spanish banking group Banco Bilbao Vizcaya Argentaria (BBVA) has announced that it has issued the first structured green bond using blockchain technology to negotiate the terms and conditions.

A structured bond is a debt instrument that typically consists of one or several bonds and one or several derivative instruments. Green bonds address a growing need identified by governments and investors to finance initiatives that support economic growth and provide environmental benefit.

In its announcement, BBVA said that it used a blockchain platform to close a the deal with Spanish insurance house Mapfre, which has invested 35 million euros ($40M USD) to finance green projects within the BBVA’s framework of the Sustainable Development Goals (SDG).

“With this bond issue, the BBVA Group demonstrates that it has the means, knowledge, and commitment to provide its clients cutting-edge products based on the latest technologies and innovative sustainable solutions,” BBVA said. “The terms of the bond were negotiated on BBVA’s internally developed blockchain platform.”

BBVA’s blockchain platform allows all participants to have access to the transaction, reduces issuing time and ensures that negotiations and agreements reached are traceable and immutable. In addition, the platform allows the client to choose between numerous product configuration options, providing the client considerable flexibility in terms of designing the bond that best suits their needs.

“With this deal, BBVA reasserts its firm commitment to both sustainable financing and new technologies,” said Juan Garat, BBVA’s Head of Global Sales. “Using DLT – distributed ledger technology – for this transaction allowed us to simplify the processes and streamline the negotiation time frames, which is in line with our pursuit of excellence in customer service.”

In December 2018, BBVA and the European Investment Bank Group signed a synthetic securitization of €1 billion ($1.1B USD) on blockchain to foster support for small and medium-sized enterprises (SME) in Spain, providing them with loans on favorable terms.