Seven major financial institutions have tied hands to explore together the development of post trade blockchain infrastructure for Small and Medium Enterprises (SMEs) across Europe.
According to the press release, the large financial institutions that have signed the Memorandum of Understanding (MoU) includes BNP Paribas Securities Services, Caisse des Dépôts, Euroclear, Euronext, S2iEM and Société Générale along with a broad-based French industry group Paris Europlace. This pilot agreement is open to other international partners as well.
“We wanted to engage collaboratively in order to mount an innovative project with the potential to drive the transformation of the post-trade market,” the joint statement read.
The agreement is a part of the development of a new regulatory environment in France which allows the issue and circulation of securities using blockchain technology. The partnership aims to improve SMEs' access to capital markets and will facilitate secure and transparent post-trade operations.
“By pooling our strengths in this ground-breaking area, we are focusing on new solutions that will give small and mid-sized companies -- key actors for growth in Europe – easier access to the financing they need. With this project, we are securing the means to seize opportunities that blockchain distribution can offer: speed of execution, low cost and security,” the statement added.
The key objective of this collaboration is to promote innovation through a new, independent company whose mission will be to harness blockchain technology in the design, development and deployment of innovative solutions for post-trade.
The collaboration would help small and medium firms to raise funds more easily on capital markets by helping in reducing transaction costs and at the same time, maintaining a high level of security. Blockchain technology has the potential to enhance and streamline post-trade operations. The distributed ledger technology facilitates securities registration for the European market and allows fast execution of trades with clearing & settlement in real time at T+0.
