Banking giant CEOs say blockchain will become global standard for banks in 5 years

Banking giant CEOs say blockchain will become global standard for banks in 5 years

BBVA has been working on a pilot project for issuing corporate loans through a blockchain-based system.

Two CEOs from major global banking institutions have issued statements saying that blockchain technology will become a global standard for banks in five or six years.

Ralph Hamers, CEO of ING Group, in an interview with CNBC’s Arjun Kharpal at the Money 2020 fintech conference in Amsterdam, said that banks are on their feet, developing their own solutions. He even adds that it can be “forced” as the standard for global banking.

“I think the banks are really working on this now because the potential is so huge and if the top five, six global banks would put their minds to it and agree on a standard, you could force (that) standard onto the globe,” Hamers said. “And I think that you can actually then get to a timeframe of five or six years in which this will work.”

Hamers’ statement follows his assertion that the only technology that should make it into a bank’s system is something that “has merits” and fulfills the bank’s plan. “You just don’t go and adopt technology because it is fancy,” he said. “It has to really have merits.”

Multinational Spanish banking group Banco Bilbao Vizcaya Argentaria (BBVA) CEO Carlos Torres Vila told CNBC that blockchain technology holds a lot of promise, and that he thinks Hamer’s estimate of five or six years to establish the tech as a global standard is correct.

“We believe there is huge promise in blockchain. It is early times in this technology but it can bring about more efficient processes,” Vila said, reiterating that he is optimistic about it. ”I am, I think it does have that promise and I think that timeframe should be about right… but we will see how it develops.”

As blockchain technology gain ubiquity, several banks have been ensuring that they stay on top of the game by joining the revolution. In fact, BBVA has been collaborating with Spanish technology company Indra to develop the first global corporate loan project using blockchain technology. In April, the pilot project saw €75 million ($91 million) issued through two different blockchains, which involved the entire loan issuance process. The pilot cut down the negotiation time frame from days to just hours.

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.