Spain’s second-largest bank Banco Bilbao Vizcaya Argentaria (BBVA), has completed the first “structured green bond using blockchain technology to negotiate the terms and conditions.” The deal was completed in collaboration with Spanish insurance house MAPFRE. According to a press release, released on February 19, 2019, MAPFRE will be investing USD 40 million to fund sustainable products. As a part of this deal, funds will be used to promote green projects within the bank’s framework of sustainable development goals.
This is also the first successful project to be negotiated on a blockchain platform. The bank’s official statement says that the funds will specifically finance green projects under BBVA’s Sustainable Development Goals (SDGs). Juan Garat, the Head of Global Sales while emphasizing company’s focus on innovative, sustainable solutions said,
“With this deal, BBVA reasserts its firm commitment to both sustainable financing and new technologies […] using DLT — distributed ledger technology — for this transaction allowed us to simplify the processes and streamline the negotiation time frames.”
Structured bonds have recently become attractive alternatives to traditional debt securities because of the flexibility involved in defining their terms. Explaining the bond’s details, José Luis Jiménez, the Chief Investment Officer at MAPFRE said:
“The bond contributes to the diversification of MAPFRE’s investment portfolio, and it does so with an innovative and sustainable product – two qualities that fully align with the company’s investment policy.”
BBVA has been the pioneer of blockchain technology for quite some time now, especially in the context of Spain. Last year, in December, they had announced the conclusion of a €150 million ($169 million) via blockchain technology. This was BBVA’s first blockchain-based loan transaction involving a non-Spanish borrower.
Along with BBVA, another leading bank, Banco Santander had signed a deal with the European Union-International Association for Trusted Blockchain Application where the aim is to create EU blockchain guidelines and create a launching pad for blockchain-based applications within the EU territory.