BBVA, a Spanish banking group, and the European Investment Bank Group (EIB Group) have signed a synthetic securitization agreement of €1 billion, using blockchain technology.

Synthetic securitization is the process via which banks manage specific risks. In other words, the financial process of securitization represents an insurance policy used by banks to evade risks related to their SME loan portfolio.

Reportedly, this is the third blockchain-powered securitization carried out by the EIB Group in collaboration with BBVA. Moreover, the two organizations have planned to offer €360 million to fund investment projects of SMEs and mid-cap firms. Earlier, the EIB Group and BBVA had signed a synthetic securitization agreement of about €600 million to fund Spanish SMEs.