International Banks Tested Blockchain In Loan Sphere
As previously reported, several financial institutions issued a loan on the Corda blockchain platform, developed by the R3 consortium. The technology was first tested in the area of syndicated loans, with the participation of a group of international banks.
Using the distributed ledger of the Corda platform, Brazilian Itaú Unibanco borrowed $100 million via a club loan from a major British bank Standard Chartered and an American-based Wells Fargo.
At the same time, four European financial institutions also conducted a transaction with a debt issuance on the Corda blockchain. A French bank Natixis, a Dutch financial company Rabobank, as well as ING and Commerzbank issued a one-day commercial paper for €100,000.
According to Marnix Bruning from the ING bank, which acted as a dealer during the transaction, operations with commercial papers, conducted in real time on a blockchain, are more effective, cost-efficient, and able to reduce risks.
Moreover, with the proof of concept protocol (PoC), which the banks used on the Corda blockchain, it is possible to track revisions in a loan agreement, comments, and other nuances. Germana Cruz, a Standard Chartered representative, said that the blockchain solution removes the need for email exchange and allows monitoring the fulfillment of contract terms in real time.
These two transactions were held amidst the recent news about the launch of a payment system Corda Settler. The company-developer R3 added support for the XRP tokens into the blockchain application, and it is still the only cryptocurrency available for international payments and transfers within the system.