BBVA Partners with Repsol to Leverage Blockchain, the Bank Issues €325M Credit Facility with DLT

The Spanish bank BBVA partnered with the energy company Repsol to develop corporate finance solutions based on blockchain. As a first move, the banking giant transferred a credit facility worth 325 million Euro using several public and private blockchain platforms. The deal comes despite the fact that BBVA CEO Carlos Torres has recently said that blockchain was immature and had significant challenges.

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In April, BBVA became one of the first major banks in the world to apply distributed ledger technology (DLT) for a real use case when it carried out a corporate loan deal using Hyperledger and Ethereum testnet.

The Bilbao-based bank claims that this is the first instance when a credit facility has been issued with the use of blockchain. The technology speed ups processes and increases security. As in the transaction in April, BBVA conducted the transfer using a private blockchain network based on Hyperledger, while the signed contract was recorded on Ethereum testnet via a hash to ensure immutability.

Speaking at the Spanish Association of Economic News Journalists (APIE) conference held at the International Menéndez Pelayo University (UIMP) in Santander, BBVA’s head of strategy and blockchain Alicia Pertusa said:

“This operation is the fruit of BBVA’s pursuit of integrating innovative and disruptive financial products for corporate clients and to offer them the best solutions that meet their needs.”

The bank also said that it intends to continue with its blockchain-based loan facilities and will trial negotiating and contracting syndicated loans using DLT.

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Nuria Ávalos, head of Blockchain and Digital Experimentation at Repsol, commented:

“Repsol wants to actively take part in collaborative environments. Blockchain is a disruptive technology that is here to stay and the agreement with BBVA advances our strategy of driving digitization in all areas of our activity.”

Speaking at the same event in Santander, BBVA’s CEO noted that blockchain technology was not mature enough and faced several challenges, such as the high volatility of the underlying cryptocurrencies and compatibility issues with financial regulators. However, he admitted that the technology had disruptive potential and that the bank would adopt it.

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Author: Anatol Antonovici
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