BBVA, EIB Group Use Blockchain for €1B Synthetic Securitization

Spanish banking giant BBVA (MC:BBVA) and the European Investment Bank Group (EIB Group) leveraged blockchain to sign a synthetic securitization of 1 billion euro. The synthetic securitization is a financial process through which banks mitigate specific risks. In simple terms, the procedure represents an insurance policy needed by banks to hedge the risks related to their small to medium enterprise (SME) loan portfolio.

The agreement is said to be the first blockchain-based synthetic securitization in the European Union (EU) and the third blockchain-powered corporate loan securitization conducted by the EIB Group in collaboration with BBVA. Also, the two entities will offer 360 million euro to fund investment projects of SMEs and mid-cap firms.

The EIB Group and BBVA signed a synthetic securitization agreement to finance Spanish SMEs with about 600 million euro …

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