LatAm List – This week, Brazil’s Itaú Unibanco became the first bank in Latin America to complete a loan using blockchain ledger technology, using the R3 Corda Connect platform. The US$100M loan, provided by Wells Fargo and Standard Chartered, was meant to test the digital system, although many regulators still have doubts about transparency.
Blockchain loans may decrease transactional costs and fraud, although banks have been slow the adopt the technology for a number of reasons. Managing director for treasury at Itaú Unibanco, Ricardo Nuno, blames regulations and challenges of implementing new technology on top of legacy systems. Yet venture capitalist Nathan Lustig had a different theory:
“Banks’ conservative and profit-driven approach to lending is another factor holding them back from investing more in blockchain,” he said in an interview with Reuters.
He suggests that banks could partner with smaller tech organizations to create the infrastructure needed to support these blockchain projects. Although the transaction was successful, the system will require further testing before being used widely.
Read more in Reuters.