AACB develops blockchain alternative for escrow accounts

ABN AMRO Clearing Bank has developed an alternative to escrow accounts based on blockchain technology, in consultation with fintech Nxchange.

Most non-bank organizations who are entrusted with client funds use escrow accounts to manage those funds. Organizations that manage client funds include brokers, exchanges, pension funds, notaries, and product service providers. Clients transfer money to these organizations 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.

Every individual client of the non-bank organization gets a bank account with the ABN AMRO Clearing Bank (AACB) via the blockchain. That way, fund flows between the organization 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. Nxchange is the first client to launch this solution.

Read the full release

 

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