BBVA, BME and IDB issue the first regulated bond in Spain registered with Blockchain

Since February this year, BBVA, BME, IDB and ioBuilders have been working on this ground-breaking project, where the development of a blockchain platform allows registration, trading in the secondary market and lifecycle management of a bond issued in a regulated market. Smart contracts have been used for the execution of distribution, buying and selling, settlement and corporate events, using electronic money tokenized by BBVA for handling cash throughout the issuance period.

This blockchain platform development project has been led and managed by BME and IT partner ioBuilders, in alliance with LACChain, an initiative promoted by the IDB that aims to accelerate the use of blockchain technology to promote development. This will allow BBVA to export the technology to the Latam region, where access to alternative project financing is more limited.

In addition to the role of tokenizer of digital money, BBVA has taken on several critical roles, such as digital custodian, digital structure and active bookrunner for the transaction. Citi has acted as agent. Iberdrola and Renta 4 have acted as investors in the bond.

Jesús Benito, CEO of Iberclearexplains that “this issue is further evidence of the innovative spirit of BME, which is constantly seeking improvements through technologies such as blockchain, in order to continue to play a leading role in the digitization and modernization of the financial market”.

With this issue, BBVA is building its digital asset strategy in the financial markets based on real and live transactions. Regina Gil, head of global credit at BBVAexplains: “We wanted to evaluate whether blockchain transactions can be executed with the current market infrastructure in terms of trades and system interconnection for underwriters and institutional investors. This pilot reduces issuance costs and time, opening up opportunities for smaller issuers and less developed economies.”

Irene Arias Hofman, CEO of IDB Labpoints out that: “Beyond the technological aspects, the creation of this bond could have a very strong transformational economic and social impact. In fact, we expect it to bring such significant reductions in issuance frictions and costs that they could lead to an expansion of capital markets, making them accessible to small investors. For the IDB Group, it is also a basis for future development to finance green investments, women’s entrepreneurship and social impact of high strategic interest”.

Gustavo De Rosa, Vice President of Finance and Chief Financial Officer of the IDBstates: “We are very happy to participate as an issuer in this pilot project and thank BME, BBVA and ioBuilders for this. Through the bank’s Treasury division, we seek to continuously innovate, by exploring new financial instruments and services that promote the social and economic development agenda for our member countries The rapid growth we have seen in the use of blockchain technology and smart contracts is proof of the potential of this technology in terms of transparency, programmability and redundancy in financial transactions.

The first issuance of a blockchain-based bond is part of the strategy of the SIX group, to which BME belongs, to shape the market infrastructure of the future. This project confirms BME’s commitment to develop new blockchain-based solutions aimed at investorsthose that streamline processes and maintain the same control, transparency and security standards as regulated financial markets.