Borsa Italiana, part of London Stock Exchange Group (LSEG) and IBM (NYSE: IBM) today announced that it is building a blockchain solution to digitize the issuance of securities for small and medium enterprises (SMEs) in Europe.

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The new system is intended to create a distributed shared registry containing a record of all shareholder transactions, helping to open up new opportunities for trading and investing.

“Through our work with IBM on this blockchain solution, Borsa Italiana is taking the lead in transforming the way European SMEs can manage their shareholder data and at the same time expand credit access – all on a trusted digital platform,” said Raffaele Jerusalmi, CEO, Borsa Italiana.

Traditionally, private SMEs lack access to public stock exchange networks or formalized credit structures.

“LSEG is testing the use of blockchain technology in a financial business network where data segregation and confidentiality is vital. By working with IBM, a pioneer in building enterprise-class blockchain solutions, we are committed to building, testing and scaling our capabilities in emerging technologies over time,” said Chris Corrado, Group COO and CIO, London Stock Exchange Group.

The solution is also built to achieve interoperability with LSEG’s existing systems, promoting efficiency and business continuity.

“Sharing secure and transparent critical network data across shareholder networks is difficult using traditional system,” said Marie Wieck, general manager, IBM Blockchain. “Blockchain is poised to help remove some of these barriers in traditional methods for the transfer of value – much as the Internet did for the exchange of information in the late 1990s.”