Seven financial institutions have combined forces to explore how blockchain tech could help lower the costs of providing post-trade settlement services to small- to medium-sized enterprises (SMEs).
BNP Paribas Securities Services, Caisse des Dépôts, Euroclear, Euronext, S2iEM, Société Générale and Paris EUROPLACE announced today they have signed a memorandum of understanding to develop the initiative. By lowering the costs of post-trade services, the group says SMEs could better access to financing through the capital markets.
The partnership will also consider launching an independent company to design, develop and deploy blockchain technology to other international post-trade partners.
In recent months, financial institutions from all over the world have been partnering and joining consortiums to develop blockchain infrastructure for various areas of the banking system. However, activity has also been strong in France, where 11 financial services firms announced a similar partnership in December to evaluate the ethical and regulatory implications of the technology.
The latest move aligns with the thinking that for permissioned blockchains to succeed, institutions that have traditionally been competitors will have to collaborate.
“By pooling our strengths in this ground-breaking area, we are focusing on new solutions that will give small and mid-sized companies – key actors for growth in Europe – easier access to the financing they need,” a joint statement issued by the group reads.
The group cited the speed of execution, low cost and security that blockchain could provide as driving factors behind the initiative.