Spanish Bank BBVA, Madrid Govt Close Blockchain-Powered Sustainable Schuldschein Loan

Blockchain, News | April 5, 2019 By:

Spanish banking group Banco Bilbao Vizcaya Argentaria (BBVA) has closed a blockchain-powered sustainable “Schuldschein” loan for the Madrid government.

Structured as per the German debt instrument, the deal is worth €220 million and will be allocated to sustainable projects. The deal was negotiated using blockchain technology, with both BBVA and Madrid’s regional government using their own nodes to establish a network between the two parties.

“This type of debt instrument is designed to foster transparency and finance sustainable development in the region of Madrid,” BBVA said. “To this end, Madrid’s regional government has produced a sustainable financing framework, which the leading ESG rating and research agency, Sustainalytics, assessed and deemed to be solid, trustworthy, and aligned with the Green Bond Principles. These Principles are standards that guide major financial institutions and other market participants in the selection and governance of projects that are aligned to environmental sustainability. BBVA was the structurer of this framework.”

The deal, the first of its kind with a public sector administration, reportedly enabled both parties to make progress with their digitization processes as they collaborated and shared their experience of using new technology.

“This deal is especially important having been negotiated using blockchain, a technology the bank is exploring given its obvious benefits” BBVA said. “This technology facilitates access for all the participants involved in the transaction and reduces the negotiation time thanks to the digitization of the entire process. Additionally, the DLT (distributed ledger technology) network that was established between the two parties ensured traceability and immutability during the negotiations and in the resulting agreements.”