European Investment Bank launches first Blockchain Challenge

The European Investment Bank (EIB) has held a two-day ‘Blockchain Challenge’, combining a challenge for coders with its annual conference for European bankers dedicated to treasury issues. 

The exercise was the first of its kind for the EIB and tackled the following questions: Is blockchain a new fashion or a real disruption, an evolution or a revolution in the way the banking industry operates? What are the challenges at stake for regulators, infrastructure, industry and employees?

During an opening speech, Pierre Gramegna, Luxembourg Minister of Finance, said: “The perfect traceability that lies at the heart of blockchain technology has many potential use cases for the financial centre that go beyond cryptocurrencies. In this regard, I welcome the fact that the EIB is launching the first Blockchain Challenge here in Luxembourg, one of the leading European FinTech hubs, in order to develop new smart solutions that will be beneficial for financial institutions and help push FinTech innovation in the EU.”

“We are at the beginning of a new era and blockchain will be a game changer. There will be major gains from the use of new technologies such as blockchain, generated from the simplification and streamlining of existing financial processes,” said EIB Vice President Alexander Stubb.

“The new perspectives opened up by digitalisation and distributed ledger technology must be assessed and we must all be ready to make use of them and embark on this new venture. As the EU’s financial arm, we decided to be on the active side, learn by experience and make things happen, to be a facilitator and join with our banking partners to pave the way for tomorrow’s financial industry.”

Send in the coders

The EIB invited its 25 main counterparties in the banking sector to its annual conference. While the event was running, 56 coders from 15 countries were in the adjacent room working on a 48-hour challenge: using blockchain technologies to improve the transaction process of commercial paper – a short-term financing instrument (debt securities issued on the money market) that is used worldwide in treasury operations and still relies on an ‘archaic’ and complex process.

In a pitching session, meanwhile, a team from EY won out with a solution to improve transactions using a combination of blockchain, robotics and business artificial intelligence tools to optimise the issuance process and reduce the number of exchanges between the EIB and its counterparties while maintaining each one’s role within the ecosystem. The EY team landed a Euro 5,000 cash prize and a contract with the EIB to develop its solution into a proof of concept.