The largest private bank in Brazil has collaborated with United Kingdom bank Standard Chartered to make a blockchain-based platform for small loans.
This is according to a press release published by Itau.
Itau Unibanco, which is also a major Latin American banking group, and Standard Chartered both deal with foreign banking services. The two groups have successfully conducted a proof-of-concept (PoC) for the stated platform, based on Corda Connect that is worked on by New York-based blockchain startup R3.
In addition, Itau and Standard Chartered, joined by United States multinational financial services firm Wells Fargo, have issued a club loan of $100 million to test the platform. The release indicated that points of trial contract were negotiated during the said experiement, and the document was then assessed for compliance with the conditions established and signed by both parties.
Ricardo Nuno, the head of treasury department at Itau, remarked that blockchain technology augmented the communication between the banks, which is often comprised of 2,000 words for a similar matter.
Nuno also added that the money was not actually transferred, as it was a trial, but that the platform would allow for that development in the future.
Germana Cruz, head of financial institutions for Latin America at Standard Chartered, said that the company might use the results of the trial to issue loans on blockchain in the region.
Global banking groups have initially used blockchain to raise the speed of syndicate loan issuance, along with slashing operational costs.
In 2017, seven major international banks — including BNP Paribas, BNY Mellon, HSBC, and ING — linked up to conduct major tests in the blockchain technology-based marketplace for syndicated loans, called Fusion LenderComm and supported by R3.
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