Dutch ‘big four’ bank ABN AMRO has launched a new service wherein bank accounts are issued to individual clients via the blockchain, as alternatives to escrow accounts.
ABN AMRO is shifting gears in its blockchain endeavor. The Amsterdam-based banking giant has announced a new service wherein individual client within non-bank organizations entrusted with client funds – think brokers, notaries, exchanges etc. – will directly connect with its clearing bank over a blockchain.
Used by fund managers without banking licenses, escrow accounts see clients transfer funds into these accounts before the capital is accessed by the organization. The new blockchain product effectively negates the need for escrow accounts with the transfer of funds between the organization and clients included in the payment process.
The bank contends its blockchain-based bank account with the ABN AMRO Clearing Bank (AACB) will ‘dramatically’ cut down on administration costs for the organization by ‘eliminating escrow account management costs.’
Amsterdam-based FinTech stock exchange operator Nxchange will become the bank’s first client to use the blockchain-based bank accounts. The exchange, which enables direct securities trading between companies and investors, will begin using the service this month.
Nxchange chief executive Marleen Evertsz stated:
"The solution simplifies the way investors can invest in businesses and other issuers. Block chain technology also offers a wider future perspective to facilitate transactions in multiple asset categories in distributed networks.”
The launch comes after a number of blockchain R&D initiatives undertaken by the Dutch bank in recent years. The bank has already piloted ‘Torch,’ a mobile application that facilitates real estate transactions by connecting all parties – buyers, sellers, landlords, tenants, the land registry office and more – on a single blockchain.
Featured image from Shutterstock.