ABN AMRO’s Blockchain Solution Aims to Eliminate Escrow Services
In a bid to make life easier for non-bank organizations, highly reputable Dutch bank ABN AMRO has created a new service, based on blockchain technology. This innovative and revolutionary service will enable non-bank organizations to manage clients’ funds without using escrow accounts.
No More Escrow
One of Netherland’s ‘big four’ banks ABN-AMRO announced on February 15 that its new service would provide every individual client of non-bank organizations (exchanges, brokers, pension funds, etc.) with a blockchain-powered ABN AMRO bank account. With the new system, movement of funds between the organization and its clients is carried out seamlessly and transparently, thanks to the distributed ledger technology.
Cost Efficient and Transparent
This blockchain integration eliminates third parties in the form of escrow services and drastically reduces administrative costs for the firms since the companies will no longer need to pay for escrow account management services.
FinTech company, Nxchange, is the first firm to take advantage of this innovative service from the stables of ABN AMRO Clearing Bank (AACB).
A high-ranking official who has contributed immensely to the commercial success of the bank, Jan Bart de Boer, reiterated that:
“Nxchange is the ideal party to be starting this innovation with. They’re innovators themselves; their business model is geared toward efficiency and transparency. The next step is to jointly check and access the new functionality and to make improvements where necessary. After that, the service can be made more widely available. We’re seeing a great deal of market interest for this service.”
Nxchange is a revolutionary stock exchange that allows companies trade in securities with their investors, directly. The firm makes trading in securities on a regulated platform without passing through third parties like banks or brokers easy.
The CEO of Nxchange, Marleen Evertsz stated, “We can’t wait to get started on this cooperation. The solution simplifies the way investors can invest in businesses and other issuers. Blockchain technology also offers a wider future perspective to facilitate transactions in multiple asset categories in distributed networks.”
The Best Solution for Brokers, Exchanges, and Others
AACB’s blockchain solution will be of utmost benefit to brokers, exchanges, product service providers, pension funds and all other organizations that do not have banking licenses but handle clients funds meant for payments or investment purposes.
Since these organizations are not permitted by law to have banking licenses, they use third-party escrow accounts to handle the funds. However, all that will stop now as they can now offer clients individual accounts via AACB’s blockchain platform.
A Clear Leader in Finance
ABN AMRO is no doubt a key player in the Dutch banking sector. The banking giant has been exploring the possibilities of blockchain technology since 2016. The firm first started with carrying out research on infrastructure “fabric” that would expand the blockchain and make it usable across devices.
The bank in 2016 announced the launch of its innovative pilot application known as Torch, which enhances real estate transactions by connecting all parties together on a single blockchain.
That’s not all; ABN AMRO is the bank that helped the bitcoin city of Arnhem to become what it is today, by supporting a bank account for BitKassa, which provides a way for businesses to accept bitcoin without being exposed to the cryptocurrency’s volatility. At the Future of Bitcoin conference in 2017, BitKassa’s Patrick van der Meijde revealed that other banks rejected their requests for an account to enable bitcoin adoption in the Dutch city.