Major Financial Institutions Join Forces to Develop Blockchain Infrastructure for SME Post-Trade on Euronext

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Seven major European financial institutions today announced that they have signed a Memorandum of Understanding to explore together the development of a post-trade Blockchain infrastructure for SMEs in Europe. 

The consortium includes BNP Paribas Securities Services, Caisse des Dépôts, Euroclear, Euronext (Paris:ENX) (Amsterdam:ENX) (Brussels:ENX), S2iEM and Société Générale, in collaboration with Paris EUROPLACE.

Open to other international partners, this pilot agreement aims to improve SMEs’ access to capital markets while facilitating secure and transparent post-trade operations. It is part of the development of a new regulatory environment in France that allows the issue and circulation of securities using Blockchain technology.

The partnership’s main objective is to combine its members’ financing capacity and expertise 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. By reducing transaction costs while maintaining a high level of security, the company would help SMEs raise funds more easily on capital markets. Blockchain technology has the potential to significantly enhance and streamline post-trade operations by facilitating securities registration for the European market and allowing fast execution of trades with clearing & settlement in real time at T+0.

The new partners issued a joint statement noting:

“We wanted to engage collaboratively in order to mount an innovative project with the potential to drive the transformation of the post-trade market. 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.”

Blockchain technology is based on a virtual ledger that assembles data for shared distribution between many different users. To appear in the ledger, data must be organized in blocks, each bearing a digital signature verified by users. New blocks can only be added to the chain if they are approved by the majority of users, and if the new unit is in keeping with existing blocks. Once added to the chain, the block is linked to these validated, unalterable blocks. The resulting decentralised security mechanism makes Blockchain a pioneering technology that is widely used for data transmission.

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Founder of Blockchain News and The Hackitarians Foundation, Richard Kastelein is an award winning publisher and editor, hackathon organiser and entrepreneur. He has written over 700 articles at Blockchain News, has a massive network in the Blockchain arena and is available as a speaker and consultant. (richard@the-blockchain.com) Kastelein has spoken (keynotes & panels) on technology at events in Amsterdam, Barcelona, Belfast, Berlin, Brussels, Brighton, Copenhagen, Cannes, Cologne, Curacao, Frankfurt, Gdansk, Hollywood, Hilversum, Geneva, Groningen, London, Las Vegas, Leipzig, Madrid, Melbourne, NYC, Oxford, Rio de Janeiro, Sheffield, San Francisco, San Jose, Sydney, Tallinn, Vienna, and Zurich. A Creative Technologist & Canadian (Dutch/Irish/English/Métis) his career began in the Native Press (Canadian Arctic) and he later spent a decade in the Caribbean media. Currently, he writes occasionally for Wired Insights, Guardian & Virgin and his articles have been translated into Dutch, Greek, Polish, German & French.