Spain are becoming the global front runners in implementing blockchain technology into commercial banking operations. 33% of the country’s banking sector formed a consortium last week with technology experts to review potential new services using the technology that gave birth to bitcoin.
They join the largest two banks in Spain, Santander and BBVA, whose expensive blockchain development projects began over a year ago. Santander partnered with the cryptocurrency Ripple back in late 2015, with a view to applying their revolutionary ‘proof of concept’ model to international payments, making them cheaper and much more efficient.
BBVA Uses #Ripple #Blockchain for Spain-Mexico Money Transfer in Seconds – CryptoCoinsNews https://t.co/Q2SzqFuBG2 pic.twitter.com/Q5sogIGPOC
— CryptKeeper (@CryptKeeperBTT) May 2, 2017
Cecabank announced the consortium last Sunday, and claimed that, rather than being an intellectual exercise, they formed the consortium in order to ‘create new products and services’. They did not name the other banks that joined the consortium, but Spanish paper El Pais reported that the group’s membership includes Abanca, Bankia, CaixaBank, Kutxabank, Ibercaja, Liberbank and Unicaja.
Blockchain cryptocurrencies are decentralised; they are divorced completely from any central bank or governing body. This may explain their attractiveness to Spanish financial bodies who are still crippled from the Eurozone crisis.
Caught between the hapless duo of the European Central Bank (ECB) and the Spanish government, Spanish financiers can be forgiven for seeking out a new method of transaction which makes both redundant.
Critics of the ECB claim that artificially-low interest rates caused overlending that fuelled the Spanish property bubble which burst in 2007. After the crisis, the nature of the ECB – being a central bank that oversees 19 vastly different economies – meant that it was impossible to create a fiscal policy that was attentive to each struggling economy, each with varying levels of inflation.
Critics of the Spanish government claim that they were blind to the speculative property bubble that ultimately crippled Spain, and even fed it because of the increasing tax revenues that they were receiving. Regulators and government analysts parroted the ‘all is well’ mantra as investment in Spain kept rolling-in, but failed to prepare for inevitable defaults.
Spanish banks, downgraded by credit agencies and set with punitively high interest rates and regulations, believe that they are paying the price for their government’s incompetence.
Seeing bitcoin fly without any central authority has tempted Spanish financiers to dream of an alternative.
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