Partnership of Top Banks Introduces Blockchain to Latin America

Latin American countries now stand to benefit from the power of Blockchain technology due to a partnership forged between Itaú Unibanco and Standard Chartered.

Blockchain’s appeal continues to increase due to the many use cases the technology holds because of its intrinsic characteristics like transparency and immutability. On the other hand, Blockchain remains to be popular in the field of finance.

In an effort to reduce costs and boost transaction efficacies, top players in the finance industry are increasingly welcoming the benefits Blockchain has to offer. JPMorgan and Standard Chartered are only a few of the most prominent entities that have embraced Blockchain tech.

In a December 4 report by Reuters, Standard Chartered and Banks Itaú Unibanco Holding SA have forged a partnership in order to introduce the innovation to Latin America. The partnership aims to create a Blockchain-based platform to expedite “small syndicated loans,” otherwise known as club loans.

The partners are convinced that Blockchain can reduce the dangers of fraud and processing costs at the same time simplifying the lending process itself. The partners, together with Wells Fargo & Co, have trialed their platform by means of raising $100 million in a club loan.

New York-headquartered startup R3 has developed the platform dubbed as Corda. R3 develops Blockchain-based solutions for businesses in the finance industry.

Ricardo Nuno, treasury managing director of Itaú, states that while Blockchain has been utilized in transacting the loan terms, money is not actually involved in the transfer trial. Still, Nuno assures that the platform is capable of doing so in the future.

He adds that the platform has been useful in reducing costs in the trial not to mention lessening the volume of messages sent to and fro stakeholders involved, which usually takes roughly 2,000 emails.

Standard Chartered seems to have been encouraged by the test run. Standard Chartered head of financial institutions for Latin America Germana Cruz says that the bank hopes to trial the Blockchain innovation on new deals with other countries in the region.