Euroclear Moves Ahead With Securities Trading Blockchain
- The Belgian firm wants to build a system for the trading of European Commercial Papers
Securities clearing firm Euroclear said on Wednesday that it is working on a Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term-based solution for the issuing and settling of the issuance and settlement of European Commercial Paper (ECP).
According to research by Reuters, the ECP market is worth approximately $1.2 trillion.
The commercial papers are used by major companies as short-term securities. Firms generally issue them when they need to meet short-term Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you Read this Term, such as paying staff members.
Euroclear's solution would allow for the trading of these securities on the blockchain.
The settlement services provider has completed a 'proof of concept' paper with Banco Santander, consultancy firm EY, and the European Investment Bank - a pan-European lending institution controlled by EU member states.
More to come
"We are delighted to have completed this proof of value with our partners and excited by the innovation opportunities it creates," said Edwin De Pauw, head of data services and innovation at Euroclear Group.
"Our ambition is to deploy an efficient blockchain powered solution that supports further growth of intra-day issuance for ECP markets.”
Having completed its proof of concept, Euroclear said that it would be moving ahead with a pilot phase - a trial period used by firms to dry-run new technology.
The clearing company said that a number of other ECP market participants had expressed interest in becoming a part of the project.
”This proof of value further validates the potential impact of blockchain technology on the securities issuance process," said John Whelan, head of digital investment banking, Banco Santander. "There is a huge opportunity to introduce efficiencies, reduce time-to-market and improve the experience for issuers and investors.”
Securities clearing firm Euroclear said on Wednesday that it is working on a Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term-based solution for the issuing and settling of the issuance and settlement of European Commercial Paper (ECP).
According to research by Reuters, the ECP market is worth approximately $1.2 trillion.
The commercial papers are used by major companies as short-term securities. Firms generally issue them when they need to meet short-term Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you Read this Term, such as paying staff members.
Euroclear's solution would allow for the trading of these securities on the blockchain.
The settlement services provider has completed a 'proof of concept' paper with Banco Santander, consultancy firm EY, and the European Investment Bank - a pan-European lending institution controlled by EU member states.
More to come
"We are delighted to have completed this proof of value with our partners and excited by the innovation opportunities it creates," said Edwin De Pauw, head of data services and innovation at Euroclear Group.
"Our ambition is to deploy an efficient blockchain powered solution that supports further growth of intra-day issuance for ECP markets.”
Having completed its proof of concept, Euroclear said that it would be moving ahead with a pilot phase - a trial period used by firms to dry-run new technology.
The clearing company said that a number of other ECP market participants had expressed interest in becoming a part of the project.
”This proof of value further validates the potential impact of blockchain technology on the securities issuance process," said John Whelan, head of digital investment banking, Banco Santander. "There is a huge opportunity to introduce efficiencies, reduce time-to-market and improve the experience for issuers and investors.”