SIA, a subsidiary of CDP Equity – a holding company of Cassa depositi e prestiti Group that is a digital payments provider and tech-solution for financial services, has signed an agreement with WizKey to launch a platform available to banks, funds, and financial operators to negotiate credits for SMEs using blockchain technology.
According to a release, the partnership seeks to develop an ecosystem that creates a transparent, efficient, and liquid secondary credit market. The partnership will utilize SIA’s technology infrastructure, credit trading and assignment process, including NPL (Non-Performing Loans) as well as securitization.
The European Banking Authority (EBA) reports that the nominal value of loans under moratorium as of June 2020 totaled €871 billion. France has the highest level of exposure at €255 billion followed by Spain at €187 billion and €Italyat 156 billion. This is the sector the partnership seeks to target Each credit portfolio on the platform will have its own permanent data room where the history, the documents and all the results of due diligence activities are available and notarized using distributed ledger technology (DLT), avoiding information asymmetry risks and protecting the parties involved in the process. The service will enable competitive private and public auctions and transfer credit portfolios in just a few clicks.
Daniele Savarè, Director of Innovation & Business Solutions at SIA, commented:
“The creation of an advanced ecosystem for credit trading represents one of the first initiatives at international level based on blockchain, confirming SIA’s constant focus on the development and implementation of innovative solutions for the financial community. The main objective of this project launched together with Wizkey is to support banks in managing credits, especially non-performing ones, in a standardized and secure manner in line with the indications of European regulators.”
Marco Pagani, CEO and founder of WizKey, said the 2008 financial crisis showed how inefficient management of non-performing loans can put an entire country system under stress.
“It is increasingly evident that we need technologically advanced tools to deal with the next wave of NPLs, which is closely linked to the current recession and will manifest itself even more vigorously in the coming years. The partnership with SIA is a key starting point to promote a systemic initiative for all financial operators in the context of a new Italian digital renaissance. Thanks to an exponential improvement of the technology infrastructure, it is already possible to create a transparent, liquid and efficient secondary market for NPLs thus benefiting the entire country system.”
WizKey uses the Ethereum blockchain to create Non-Fungible Token under the ERC-721 standard.