ABN AMRO has launched a new service of bank accounts are issued to individual clients via the blockchain, as alternatives to escrow accounts.
Most non-bank organisations who are entrusted with client funds use escrow accounts to manage those funds. In consultation with Nxchange, ABN AMRO Clearing Bank has developed an alternative based on block chain technology.
With this new service, every individual client of the non-bank organisation gets a bank account with the ABN AMRO Clearing Bank (AACB) via the blockchain. That way, fund flows between the organisation and its clients are included in payment processes under regular supervision, guaranteeing the required transparency. This block chain method drastically reduces administrative costs for the organisation by eliminating escrow account management costs.
Fintech Nxchange is the first client to launch this solution, starting in February.
Great market interest
AACB’s Jan Bart de Boer, who is responsible for commercial success, elaborates: “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 assess 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 next-generation, white-label stock exchange where companies and financial institutions issue and trade equity and bonds. Using the platform, these companies and institutions can collect capital directly from their own websites, offering investors a regulated equity and bond trading environment. Nxchange CEO Marleen Evertsz: “We can’t wait to get started on this cooperation. 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.”
Brokers, exchanges, pension funds
Organisations that manage client funds include brokers, exchanges, pension funds, notaries, and product service providers. Clients transfer money to these organisations to be used for investments or payments. Since these organisations do not have a banking licence, they have been forced to use escrow accounts – to date, that is. From now on, these organisations can offer their clients individual accounts with AACB through the block chain.