The largest commercial bank of Brazil, the Bank Itaú Unibanco Holding SA, has reunited with Standard Chartered to create a new blockchain platform that would be used by the bank for syndicated loans in small amounts for the bank. The companies have officially unveiled the information today.
This will be the first platform of this kind to be launched in Latin America and it will be focused on what is popularly known as “club loans”, some type of small syndicated loans that are specifically made with a group of lenders that is smaller than in most loans.
For being the first of its type in the region, the platform is expected to be a huge success and to attract large investments.
Itaú Unibanco And The Blockchain Technology
Itaú has been studying the blockchain technology recently to use it asa way to reduce risks of fraud and to cut down both the complexity and the costs of financial transactions made by the bank. As many other companies in the world, Itaú has decided to use the blockchain now to make its busines simpler and more profitable.
The bank has been known to make several efforts to take advantage of the technology lately, using a shared digital record blockchain to maintain a computer of networks that will take care of transactions instead of using centralized solutions.
Together with Standard Chartered and Wells Fargo & Co., Brazil’s largest private bank Itaú was able to raise a total sum of $100 million USD to kickstart the project. The treasury management director of Itaú, Ricardo Nuno, affirmed that the platform has been extensively tested so far but it was still not used for actual transactions with other entities.
In the near future, however, the bank is planning to open up its platform to be used by its clients. The managing director Nuno believes that this could help greatly in cutting legal costs and reducing the number of messages that needs to be exchanged during the process, which would make the whole thing quicker.
Standard Chartered And The Project
The head of financial institutions for Latin America of Standard Chartered, Germana Cruz, has affirmed that the bank would first test the technology in Brazil with Itaú and that it would try new deals in Latin America later if the technology was as successful as they hoped it would be.
All of the transactions that would be made on the platform created by Itaú Unibanco and Standard Chartered would be made on top of a platform developed using the Corda technology, which is owned and developed by the R3 conglomerate and it is focused on offering financial solutions using the blockchain.
One of the largest banks in Spain, BBVA, was also reported to be developing a similar project this year. If the trend continues, many commercial banks in the world are expected to start using the blockchain technology.