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Five of Spain’s largest banks have completed a proof of concept (POC) for an interbank smart payments platform.
The platform, managed by Spanish payments services firm Iberpay, initiates instant credit transfers from blockchain networks.
The banks involved are Banco Sabadell, Banco Santander, Bankia, BBVA and CaixaBank.
How does it work?
To complete the POC, Iberpay connected blockchain networks to its payments system. This system – called the Spanish Payment System (SNCE) – processes and settles transactions between current accounts of all Spanish banks.
The integration of this system with blockchain networks saw it facilitate instant credit transfers using blockchain-based smart contracts.
The payment happens automatically depending on pre-established conditions. These conditions could be, for example, signing a contract or confirmation of shipped goods.
A private interbank blockchain network called red-i was also launched as part of the POC. The network was designed to facilitate the creation of banking services which can be used on distributed ledger technology (DLT) or blockchain networks.
This network is currently in the testing phase, and includes nodes from seven of Spain’s major banks.
Achievements to date
The platform has programmed more than 20,000 instant credit transfers so far. Average time for payment completion currently stands at 2.5 seconds.
“This initiative has confirmed the viability of employing blockchain technology to the payments sector,” the banks said in a statement.
Grant Thornton, a large US accounting firm, helped on the POC as an advisor. The firm went through “exhaustive evaluation” of the legal aspects of using blockchain for payments.
Smart contracts deployed via red-i aim to automate and speed up issuing, registering, executing and cancelling customer bank guarantees.
Next steps
Following this POC, the Spanish banks will explore “a second scope”.
This would see a connection developed between red-i and other non-banking networks or mixed networks.
This would initiate and route instant credit transfers to red-i through an Iberpay application programme interface (API).
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