Blockchain Demonstration Highlights Potential Loan Market Improvements

Credit Suisse, Ipreo, Symbiont and R3 have announced the successful initial stage completion of a project showing how Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term technology can be used to improve the syndicated loan market, according to a Credit Suisse statement.

The proof of concept will continue through the end of the year and includes participation from a number of agent banks, service providers and fund managers.

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Collaboration

The project was arranged by Credit Suisse, is being managed by R3 in its Lab and Research Center, and utilises technology solutions from Synaps Loans, a recently formed partnership combining Symbiont’s leading Smart Contract Smart Contract A smart contract is a piece of software that automatically executes a pre-determined set of actions when a certain set of criteria or met. One of the key tenets of smart contracts is their ability to perform credible transactions without third parties and are self-executing, with their conditions written into the lines of code that form themAdditionally, these transactions are both trackable and irreversible. For example, a smart contract could be used to give royalty payouts to a musical artist A smart contract is a piece of software that automatically executes a pre-determined set of actions when a certain set of criteria or met. One of the key tenets of smart contracts is their ability to perform credible transactions without third parties and are self-executing, with their conditions written into the lines of code that form themAdditionally, these transactions are both trackable and irreversible. For example, a smart contract could be used to give royalty payouts to a musical artist Read this Term technology with Ipreo’s new business process solution to speed loan trade settlement.

Emmanuel Aidoo, head of the distributed ledger and blockchain effort at Credit Suisse, said: “This project demonstrates the potential for blockchain technology to fundamentally reshape the syndicated loan market and the capital markets more broadly. This demonstration sets us on a path to increase efficiency and reduce costs, which will benefit banks and clients alike. By connecting a network of agent banks through blockchain, we can achieve faster and more certain settlements in the loan market.”

We are demonstrating that distributed ledger technology can be put to work now.

Participants who collaborated and brought important market knowledge, process experience and testing resources to the project include R3 consortium members BBVA, Danske Bank, Royal Bank of Scotland, Scotiabank, Société Générale, State Street, US Bank and Wells Fargo. Buy-side firms AllianceBernstein (AB), Eaton Vance Management, KKR and Oak Hill Advisors are also involved in the initiative.

Joseph Salerno, a Managing Director at Ipreo and CEO of Synaps Loans added: “We are demonstrating that distributed ledger technology can be put to work now. Our solution addresses actual use cases and meets production standards for maintainability, security, privacy and throughput.”

Through Synaps, loan investors have direct access to an authoritative system of record for syndicated loan data. This yields immediate savings by reducing manual reviews, data re-entry and systems reconciliation. In the future, loan data processing can be done exclusively on the distributed ledger, eliminating the cost for each market participant to maintain its own separate lending system.