Spain: Stock Exchange Operator Trials Digitization Of Pledged Collateral On Blockchain

Bolsas y Mercados Españoles (BME), a renowned stock market operator, has claimed that it has successfully finished its blockchain trial for digital certificates of pledged collaterals.

The trial was run with cooperation from Renta 4 Banco, the only BME listed firm providing investment services, and is aimed to remove the need of physical certifications by digitizing all procedures, in addition to real-time dispensation of data to network partakers.

The trial proof-of-concept (PoC) consist of delivery of collateral covenanted by Renta 4 Banco to encompass client’s positions at BME Clearing, which is BME’s central counterparty. Per the announcement, the deployment of the blockchain-backed trial permitted the parties to cut short overall processing time by excess of 80%.

The trial was setup by BME’s division DLT-Lab, which studies the application of blockchain for enhancing prevailing financial process in partnership with market regulators and several financial institutions. To setup the trial, BME’s DLT-Lab toiled with regulatory framework involved in the procedures and the BME Clearing, a subsidiary of BME, Renta 4 Banco and the Spanish central securities depository.

Per the press release, BME and Renta 4 Banco will continue to labor on the initiative so as to officially unveil the new system by the end of 2019. Berta Ares, Head of Digital Transformation at BME, stressed that distributed ledger tech (DLT) permits the groups partaking in the procedures to minimize operating durations and offer legal validity for digital certificates, while preserving privacy and legal conformity.

Beforehand, BME took part in a collaborative blockchain tech venture to file the distribution of financial warrants. The push involved eight top European financial organizations, including the National Securities Market Commission (the Spanish securities regulator), BNP Paribas, BBVA, CaixaBank and others.

Back in February, SIX Swiss Exchange – Switzerland’s main stock exchange – revealed its intention to trial blockchain deployment for its forthcoming digital trading platform SDX in the second-half of 2019. The blockchain backed platform aims to nullify trading risks and also extend the ambit of tradable assets.