Banco Bilbao Vizcaya Argentaria (BBVA) has utilized a Blockchain-based platform in issuing a corporate loan to BBVA. The significance of the deal is in the details as the transaction was worth over $170 million and the two parties wield a huge global influence in their respective industries and beyond. Hence, the transaction will set a new precedence that will, most likely, spur adoption of Distributed Ledger Technology and consequently revolutionize the world.
BBVA Will Be Using This Blockchain Platform To Advance Corporate Loans
The loans banking products can make or break a bank. On one hand, if a bank is too stringent on its standards of loan issuance, it can end up losing clients or stifling economic growth altogether. Most significantly, the institution can miss out on the revenue from interest on loans that forms a large part of overall revenue proportions.
On the other hand, advancing loans to individuals and enterprises with bad credit records or with poor business plans and financial practices can lead to loss of money through bad debts scenarios following defaulting.
Therefore, Digital Ledger Technology can provide a safe platform that utilizes a highly-advanced methodology of assessing the creditworthiness of borrowers. This is critical in the process of mitigating against the risk of bad debts or disenfranchisement of credit-worthy clients.
Porsche And BBVA Are Influential In Their Capacities
It is important to note that Porsche is a leading car manufacturer specializing in SUV, Sedans, and Sports cars. The company has headquarters in Stuttgart, Germany and is owned by Volkswagen AG, that is held by Porsche Automobile Holdings. Its high-performance cars are preferred all over the world and the company is, hence, able to earn revenues in excess of 20 billion Euros as of 2015.
Meanwhile, the BBVA is the second largest bank in Spain with its headquarters in Bilbao, Spain. The bank has over 14 million clients all over the EU and it is growing at a very high year-on-year rate that has been averaging 19% from 2015. The success is being attributed to the initiative by the bank to adopt DLT in its service delivery.
According to a statement from the BBVA bank, the loan will be used in the strategic acquisition of a retail distribution network across Asia and Europe where Porsche is looking to establish its footprint. In specific terms, the project funding has been channeled to Porsche Holding Salzburg that is tasked with distributing automotive. It is the largest car distributor in the EU.
Therefore, the Porsche, BBVA deal will popularize BBVAand spur mass adoption of Blockchain technology across all industries’ use-cases.
The End Of It Is To Create A DIY Financing For Corporate Clients
BBVA is hoping to create a ‘Do it yourself’ strategy of financing where corporate clients will be using its Blockchain platform to secure funding directly and based on the information they provide. It will be a direct and easy transaction that is fast, efficient, and hence business-friendly. All this development is a testament to the vision of Carlos Torres Vila, BBVA CEO, who assured clients of a Blockchain-powered banking platform on June 2018.