The London Stock Exchange Group's (LSEG) Italian arm, Borsa Italiana, and technology giant IBM are collaborating on a blockchain solution to digitise the issuance of securities for European small- and medium-sized enterprises (SMEs).
It will be designed to simplify the tracking and management of shareholding information by creating a distributed shared registry containing a record of all shareholder transactions, helping to open up new opportunities for trading and investing.
The framework will be built on Hyperledger Fabric version 1.0 and hosted by The Linux Foundation, which LSEG described as a highly secure infrastructure technology with the highest levels of encryption commercially available.
It will also be built to achieve interoperability with LSEG’s existing systems, promoting efficiency and business continuity.
The solution is currently undergoing an initial test phase with a small group of partners and clients.
Raffaele Jerusalmi, CEO of Borsa Italiana, said: “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.”
Marie Wieck, general manager at IBM Blockchain, said: “Sharing secure and transparent critical network data across shareholder networks is difficult using traditional system.”
“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.”
The SME blockchain market is quickly becoming the next battlefield for European banks to tussle for customers.
Earlier this week, Paris Europlace, along with seven European banking partners, launched LiquidShare, a post-trading blockchain infrastructure that will also cater for the SME market.
BNP Paribas, Caceis, Caisse des Dépôts, Euroclear, Euronext, S2iEM and Societe Generale are all stakeholders in what will become an independent company with the aim to improve SMEs' access to capital markets, as well as the transparency and security of post-trading operations using blockchain.
In a joint statement on the launch, the partnership said: “With the financial support of its shareholders, the company aims to develop and operate a post-trading infrastructure that will serve these companies specifically. Eventually, the solution aims to reduce transaction costs.
LiquidShare will be based in Paris and led by Thibaud de Maintenant, who will act as CEO.
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