Spanish Electric Company receives loan through Blockchain

The financial institutions BBVA, BNP Paribas and MUFG (Bank of Tokyo-Mitsubishi UFJ) have joined to lend 150 million euros to Red Eléctrica de España (REE) through Blockchain.

According to the announcement made by BBVA, banks "became the first companies in the world to formalize a syndicated loan using Blockchain technology." According to the press release, the loan was negotiated in record time "using the platform developed by BBVA based on DLT technology," known as Blockchain. The process of a syndicated loan managed in the traditional way takes an average of two weeks, and with Blockchain this time is reduced tenfold, for a few hours.

 Blockchain technology is especially suited for syndicated lending. "It puts a foundation of trust in different global entities, produces a significant time savings compared to the traditional way, and adds the transparency layer," explains Luis Garvía, an ICAI-ICADE professor.

The pilot conducted by BBVA, BNP Paribas and MUFG with REE "is important". "There are relatively few syndicated loans, but they have a great impact. Although this kind of operations is not perceived by the general public, they have great economic relevance for those who develop them", says Luis Garvía.

BBVA describes the operation as "a major breakthrough in the new pilots developing on the market to exploit DLT technology. This is the first time a real transaction of this type has been completed".