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Major Latin American Bank Conglomerate Itau to Create Blockchain Platform for Small Loans

The largest private bank in Brazil, Itau Unibanco, has tested a $100 million loan on a blockchain platform powered by R3.

Brazil’s largest private bank has partnered with United Kingdom bank Standard Chartered to create a blockchain-based platform for small loans, according to a press release published by Itau Tuesday, Dec. 4.

Itau Unibanco, also a major Latin American banking group, and Standard Chartered both offer international banking services. The two entities have successfully conducted a proof-of-concept (PoC) for the mentioned platform, based on Corda Connect developed by New York-based blockchain startup R3.

Moreover, Itau and Standard Chartered, joined by United States multinational financial services company Wells Fargo, have issued a club loan of $100 million to test the platform. According to the release, the points of trial contract were effectively negotiated during the experiment, and the document was then checked for compliance with the conditions set and finally signed by both parties.

Ricardo Nuno, the head of treasury department at Itau, said that blockchain technology improved the communication between the banks, which is normally comprised of 2,000 words for a similar matter, Reuters writes.

Nuno further added that the money was not actually transferred, as it was a trial, but that the platform will definitely allow for that in the future.

Germana Cruz, head of financial institutions for Latin America at Standard Chartered, told Reuters that the company might use the results of the trial to issue loans on blockchain in the region.

Global banking groups have previously used blockchain to increase the speed of syndicate loan issuance, along with cutting operational costs. In 2017, seven major international banks —  including BNP Paribas, BNY Mellon, HSBC, and ING — partnered to conduct major tests in the blockchain technology-based marketplace for syndicated loans, called Fusion LenderComm and supported by R3.

Another banking giant, Spain-based Banco Bilbao Vizcaya Argentaria (BBVA), carried out a blockchain-based syndicated loan of $150 million in October. French banking group BNP Paribas and Japan’s bank holding Mitsubishi UFJ Financial Group (MUFG) also participated in the trial.

Cointelegraph has also reported that U.K.-based bank Natwest was set to launch a similar blockchain platform based on R3 Corda technology in the syndicated loans market in November.

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Binance (BNB) Partners Ethereum-Dependent Startup, Libra Credit, On Loans collateralized by BNB

Binance Lab, the investment section of the world’s largest cryptocurrency exchange, has made an undisclosed investment in Libra Credit, a decentralised cryptocurrency asset financial service firm.

The partnership will give room for BNB holder to have access to loans that are collateralised by BNB.

As part of the relationship, Libra Credit will lend fiat and crypto denominated assets to users who pledge BNB as collateral, a statement by Libra Credit has indicated.

Binance Labs, an arm of Binance, is a social impact fund which is saddled with the responsibility of incubating, investing and empowering projects, entrepreneurs, and communities that are affiliated with cryptocurrency and blockchain.

The purpose of the collaboration is to contain the growing global demand for liquidity of crypto assets based on the Ethereum blockchain.

The statement indicates that “Libra Credit aims to standardize distributed lending ecosystem which will expedite credit at anytime and anywhere, adding that, “users (on the platform) can collateralize their cryptocurrencies for credit in varying loan denominations”.

Ella Zhang, CEO of Binance Labs who spoke on the development said:

“The Libra Credit founding team has a wealth of experience and resources in financial services and payment solutions. They are committed to make long lasting impacts in the industry.”

In June, Binance Lab announced it was launching a $1 billion “Social Impact Fund” to expedite the growth of blockchain and cryptocurrency ideas.

The phases of the investments will receive $100 million each, making the incubator lab sick more incubators that it can invest in, which will then invest in ideas related to blockchain as well.

According to Binance, the first project to invest in was a blockchain-powered ride-hailing idea.

To achieve the incubation and mentoring process at Binance Lab, the startup has partnered with MIT Digital Currency Initiative, a leading organization in the open-source cryptocurrency space.

As well, it has collaborated with the Initiative for Cryptocurrencies & Contracts, IC3, an initiative of university faculty members who focus on Cryptocurrency & Contract.

Binance is looking up to partnering with more incubators firms to increase the growth and adoption of blockchain ideas the society.