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-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.

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The commercial papers are used by major companies as short-term securities. Firms generally issue them when they need to meet short-term obligations, 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.

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“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.”

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