OHAI: Working With Credit Suisse For Blockchain Loan Platform
Credit Suisse Blockchain Loans Platform to Launch in 2018
The blockchain-based platform could reduce barriers, as well as time and cost in making the necessary capital available…
You may have heard how the finance industry is looking to take advantage of blockchain technology beyond peer-to-peer money transfers. Today we have a story that fits into that narrative, with a group of banks led by Credit Suisse inching closer to launching a blockchain-based platform to offer loans.
Speaking to the finance magazine EuroMoney, Emmanuel Aidoo, Credit Suisse’s head of blockchain efforts, said that syndicated loan trial — which began last fall — is moving ahead.
“We are working to put a few dozen smaller loan transactions, where we or other participating banks are the agent, onto a distributed ledger platform using smart contracts in production next year,” he said.
The test envisions a syndicated loan market in which multiple lenders pool their capital for individual borrowers. The group hopes the blockchain technology can reduce barriers between counterparts, reducing both time and cost in making the necessary capital available.
Also, using smart contracts will reduce turnaround times to eventually increase the market’s appeal to both lenders and investors, according to Aidoo.
“Many investors, including mutual funds and institutional asset managers, might be attracted to loans that are senior to bonds in the capital structure, but they are put off by how long loan trades take to settle,” he added.
Second phase of testing has been completed
The second phase of testing has been completed in March. Among the banks that were included as participants, we find such giants as Barclays, BBVA, Danske Bank, LSTA, Royal Bank of Scotland, Scotiabank, Societe Generale, State Street Corporation, TenDelta LLC, U.S. Bank and Wells Fargo.
On the buy-side there were AllianceBernstein, Eaton Vance Management, KKR, and Oak Hill Advisors.
Distributed ledger startup R3’s research outfit managed the test, while the system was developed by Synaps, a joint venture backed by blockchain startup Symbiont and Ipreo — the latter of which is co-owned by Goldman Sachs and private equity giant Blackstone.
Not the only game in town…
The idea to use blockchain for a loan market is also being pursued by other parties. Japan-based Mizuho and Microsoft are working on a similar kind of platform/technology which will obviously get its power from Windows-based systems and, least partially, be run on Microsoft’s cloud servers (Azure).
However, chances are we will have to wait for at least one more year before any of these platforms is launched. In the meantime, you are free to place your bets on the cryptocurrency market, and potentially reap big rewards.
You know we can’t offer an investment advice, but we can say that we at Wallet Weekly “walk the talk,” if you know what I mean.
OHAI Block chain bank - Credit Suisse is launching a blockchain loans platform in 2018. OHAI is one of the participants in the program
On the buy-side there were AllianceBernstein, Eaton Vance Management, KKR, and Oak Hill Advisors. -OHAI https://www.walletweekly.com/credit-suisse-blockchain-loans-platform
UPDATE: OHA Investment Would Be 1 Participant Working With Credit Suisse For Blockchain Loan Platform https://www.benzinga.com/news/rumors/17/12/10921890/update-oha-investment-would-be-1-participant-working-with-credit-suisse-f