Europe's largest car distributor Porsche Holdings has completed a €150m ($170m) term loan with Spanish-based bank Banco Bilbao Vizcaya Argentaria (BBVA) via blockchain technology.
The loan was completed on BBVA's distributed ledger technology (DLT) platform and will support strategic acquisitions in the retail distribution network in Europe and Asia. Furthermore, in a blog post, BBVA stated that the deal with Porsche marked the first non-Spanish borrower using the platform for the negotiation and closing of a corporate loan.
Dominik Paschinger, branch manager of Porsche Corporate finance in Belgium commented: "With digitalization being an integral part of Porsche Holding's Strategy 2025, the goal is to advance in all fields of activity. We think that the blockchain technology has great potential and are therefore very excited to being able to explore the technological capabilities together with BBVA."
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BBVA added that blockchain technology has the ability to ensure traceability and immutability while automating the negotiation process and minimizing operational risk. The use of a DLT platform is needed for financial deals as it aids to the speed of execution – which is vital for acquisition finance transactions, the bank said.
BBVA added that this deal strengthens a long-lasting commercial relationship between the two institutions.
"The use of blockchain for the arrangement of this facility has demonstrated the extent to which new technologies can provide a leap in efficiency in financial markets."
Frank Hoefnagels, Head of BBVA CIB in Germany, said: "This transaction is all about putting blockchain technology into meaningful practice in the interactions with our clients. Our aim is to improve clients’ experience by simplifying processes and enhancing the speed of execution. To be on a common path with our longstanding partner Porsche Holding makes us equally proud."