Blockchain Trial For Collateral Pledge Completed By Spanish Bourse BME
Bolsas y Mercados Españoles (BME), a Spanish stock market operator, has successfully completed a blockchain trial for digitizing certificates used for collateral pledges.
The trial, conducted in partnership with Spanish central securities depository Iberclear and Renta 4 Banco, reportedly demonstrated a reduction in the total times of end-to-end processes exceeding 80%, with all parties to the transaction having real-time access to information on the validation of pledge agreements.
“The proof of concept (PoC)entailed the constitution and release of collateral pledged by Renta 4 Banco to cover customer’s positions at BME Clearing, BME’s central counterparty,” BME said. “Blockchain-based technology has made it possible to eliminate the creation and exchange of physical certificates in these transactions, digitizing all the processes and ensuring that all participants in the blockchain have access to the information in real time.”
The PoC was developed by BME’s DLT-Lab, which collaborates with regulators and different financial institutions to explore and analyse the use of blockchain technology in the digitalization of processes and new operational models for improving current financial processes. BME said that they will keep working with Renta 4 Banco on the developments necessary to allow the system to go live by the end of 2019.
“Blockchain technology allows us to reduce times drastically and improve the operation and control of the system, providing legal certainty for electronically generated certificates and maintaining privacy and compliance with the General Data Protection Regulation,” said Berta Ares, Head of Digital Transformation at BME.