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Blockchain demonstration shows potential loan market improvements

First Published 28th September 2016

Credit Suisse, Ipreo, Symbiont, R3 convene proof of concept for syndicated loan efficiencies.

Credit Suisse, Ipreo, Symbiont and R3 have announced the successful initial stage completion of a project to demonstrate how blockchain technology can be used to improve the syndicated loan market. 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.

The project was arranged by Credit Suisse, is being managed by R3 in its Lab and Research Center, and utilizes technology solutions from Synaps Loans, a recently formed partnership combining Symbiont's smart contract technology with Ipreo's new business process solution to speed loan trade settlement.

Participants include R3 consortium members BBVA, Danske Bank, Royal Bank of Scotland, Scotiabank, Société Générale, State Street, U.S. Bank and Wells Fargo. Buy-side firms AllianceBernstein (AB), Eaton Vance Management, KKR and Oak Hill Advisors are also involved in the initiative.

Emmanuel Aidoo, head of the distributed ledger and blockchain effort at Credit Suisse said: "By connecting a network of agent banks through blockchain, we can achieve faster and more certain settlements in the loan market."

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