Syndicated Loans Blockchain Proof of Concept Successful, Says Credit Suisse, Partners

A blockchain solution seeking to reduce settlement time for syndicated loans is now ready to move to final stages of development.

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A blockchain solution for syndicated loans is closer to reality after Synaps Loans, a joint venture of Ipreo and Symbiont, successfully completed a proof of concept of the solution with the participation of banks, service providers, and fund managers.

The demonstration was organized by Credit Suisse and R3, which are working with Synaps on the syndicated loans blockchain solution. Synaps combined Symbiont smart contract technology and Ipreo’s business process platform to speed up loan trade settlement.

Emmanuel Aidoo, head of the distributed ledger and blockchain at Credit Suisse, said the demonstration shows Synaps and its partners can move toward the final stages of development.

“Synaps now has the majority of the functionality needed to implement blockchain technology at scale in the syndicated loan market, which enables us to move into the final stages of development,” Aidoo said. “Over the coming months, we will work with Symbiont and Ipreo to implement the remaining functions to allow for distributed-ledger technology to support a syndicated loan facility from origination to payment, and work toward market adoption.”

Among the 19 participants in the demonstration were Barclays, BBVA, Danske Bank, LSTA, Royal Bank of Scotland, Scotiabank, Societe Generale, State Street, TenDelta, US Bank, and Wells Fargo. They were joined by AllianceBernstein, Eaton Vance Management, KKR, and Oak Hill Advisors.

The proof-of-concept demonstration was first announced in September last year. It aimed to determine ways to cut down on settlement time for a large multiparty syndicated loan. Loan investors will have direct access to a system of record for syndicated loan data that will reduce manual reviews, data re-entry, and reconciliation.

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