Spanish Bank BBVA Issues $150M Loan Using Ethereum

  • BBVA, the 35 billion euro bank from Spain, has officially issued a loan using the Ethereum blockchain.
  • In a test of their pilot loan program, BBVA teamed up with MUFG and BNP Paribas to lend funds to Spain’s national electric company, Red Electrica.

Spanish bank BBVA has officially issued a loan via the Ethereum blockchain. As reported by Finance Magnates, BBVA, Spain’s second-largest bank, is working on a pilot program that will issue loans using Ethereum (ETH). In the recently issued loan, Spain’s national electricity company, Red Electrica, received funding from BBVA.

This transaction represents the first real-world use of BBVA’s pilot program, and was no small test.

It is reported that the loan was valued at $150M, although it’s unclear how much was transacted using ETH. BBVA also hasn’t disclosed what currency was used to transact. The report also does not include whether it was ETH or something with less volatility, such as a stablecoin.

BBVA’s loan was what is referred to as a syndicated loan. A syndicated loan is one that splits up one borrower between multiple lenders. This allows the borrower to borrow larger amounts, while also reducing risk by spreading the loan through different lenders.

In this case, the three lenders are BBVA, MUFG (Japan), and BNP Paribas (France), and all three banks have shown interest in using blockchain technology. Previously, MUFG (the fourth largest bank in the world) has researched using their own cryptocurrency, while BNP has been in talks looking to build their own blockchain. 

The Future Of Finance?

This example shows the benefits to using cryptocurrency over traditional systems. According to BBVA, the current loan system (which is valued at 4.6 trillion euros), takes weeks to process transactions. Ethereum transactions, on the other hand, can be completed within hours.

Blockchain tech has also been touted as a great way to store signatures and contract terms, all time-stamped by which block they were included in. This means that ETH transactions can be referenced forever, whenever lenders or borrowers want to double-check the details of their loan. This could mean reduced costs and increased security for the issuance of loans:

Everything is automatically recorded by the system, in terms of back office and operational costs.

Ricardo Laiseca, Head of Global Finance, BBVA

Switzerland's Largest Online Retailer is Now Accepting Cryptocurrency Payments

Digitec-Galaxus, Switzerland’s largest online retail company, has reportedly decided to start accepting bitcoin (BTC) payments.

Digitec and Galaxus customers can now pay for goods and services with bitcoin and a few other major cryptocurrencies. In addition to BTC, users can make payments in XRP, ETH, Litecoin (LTC), Tron (TRX), OmiseGo (OMG), and NEO.

Digitec and Galaxus’ online retail outlets will also be taking payments in Bitcoin “Satoshi Vision” SV (BSV), Bitcoin Cash (BCH), and Binance Coin (BNB). Commenting on the Swiss retailer’s decision to start accepting cryptos, Oliver Herren, the co-founder and CEO of Digitec, remarked: 

Cryptocurrencies are fascinating and could become a relevant means of payment in e-commerce. We would like to support this development. We wanted to do that for a long time.

Coinify Will Help Convert Crypto Transfers To Swiss Francs

Herren added that Digitec decided to take cryptocurrencies as payment because people may have invested in them and they may want to use them. “Or because you cannot turn them into real money [since] your bank does not accept it. Or maybe just because you ...  like to try new things,” Herren said.

According to Switzerland’s e-commerce giant, it wants to encourage millennials, who may be heavily invested in the blockchain space, to start using cryptocurrencies for practical purposes such as paying for everyday goods and services. Price volatility of cryptocurrencies may not be an issue as Digitec and Galaxus will immediately convert crypto payments to Swiss francs using Coinify’s services, a third-party payment processor.

At present, crypto payments are only available for Switzerland-based users, however the company has said that it might allow customers in other areas to pay with crypto if their initial effort is successful.

Danish Food Takeaway Outlet Accepts Bitcoin Payments For Its 1500 Restaurants

In December 2018, Hungry.dk, one of the largest online food portals in Denmark, started accepting Bitcoin again. The food takeaway company handles orders from more than 1,500 restaurants in Denmark and had been accepting BTC payments since 2014. However, it had decided to stop taking crypto payments in late 2017 due to very long transaction processing times.

A representative from Hungry.dk noted (last year): 

We have accepted Bitcoins as a payment method for quite some time. We decided to remove the feature temporarily last year though because the average transaction time took too long, and the experience wasn’t the best.