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BBVA Blockchain Drive Hits a Roadblock – They Won’t Use Crypto

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It’s been a big 2018 for BBVA in terms of innovation in the world of blockchain. Looking back to April, they became the first firm to issue a global corporate loan with blockchain underpinning every stage of the process, in collaboration with Indra. They then set up a Revolving Credit Facility with Repsol, which again used blockchain, to the tune of 325 million Euros. This agreement came at the end of June.

The snag for BBVA, however, is that they are still reluctant to hold crypto. This cautious approach is down to the European Banking Authority recommendations from 2014, in which it stated that banks should steer clear of holding cryptocurrencies or using them for any kind of transaction, until a clear regulatory pathway had been drawn up. As this has not yet occurred, BBVA used an Ethereum testnet, rather than actual Ether, as their way of updating the ledger.

It’s clear that banks are playing something of a waiting game at the moment. The EBA haven’t banned the use of crypto at all – merely discouraged it in terms that would make it a risky business to set in motion, and expensive to reverse as a system if a strict set of regulations were imposed down the line. The EBA told Coindesk:

The EBA has issued several warnings to consumers regarding virtual assets and has discouraged financial institutions from gaining exposures to such assets in view of their high-risk nature. However, as a matter of EU banking law, there is no prohibition on financial institutions gaining direct or indirect exposures to such assets.

But the signs are positive for the private / public blockchain combination that BBVA have championed so successfully to date. Indeed, a recent poll from blockchain business Kaleido, shows that it is at the forefront of many people’s minds right now:

Image Credit: Deposit Photos

Is it time for the EBA to give banks some clear leeway? Let us know your thoughts.

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