Bolsas y Mercados Espanoles (BME), a Spain-based firm that deals with the organizational aspects of the Spanish stock exchange and financial markets, has joined forces with Renta 4 Banco, a financial institution providing investment services to clients, to trial blockchain technology to digitize collateral pledge certificates, according to a press release on March 14, 2019.
Simplifying Collateral Pledge Processing with DLT
As stated in its press release, BME and Renta 4 Banco, the only investment services firm listed on the Spanish stock exchange, have completed the first phase of a distributed ledger technology (DLT) pilot that aims to digitize the certification process of collateral pledges and entirely eliminate paper certificates.
The team says the blockchain proof of concept made it possible for them to substitute the manual creation and exchange of physical certificates with digitized processes, ensuring that all entities in the transaction have access to the information in real-time.
Reportedly, the pilot has drastically reduced the time required to complete end-to-end processes by as much as 80 percent and it’s also expected to significantly improve the operational and risk management processes of market participants, as it now makes it easier for them to gain direct access to essential information needed to participate in the validation of pledge agreements.
Per the team, the blockchain solution was formulated by BME’s tech arm called DLT-Lab, which is focused on developing highly-functional blockchain solutions that could transform the operational models of BME.
BME claims that its DLT-Lab has collaborated with regulators, as well as numerous financial institutions in the region, including the Spanish central securities depository Iberclear and others.
End of 2019 Launch Date
Commenting on the initiative, Berta Ares Lombán, the Head of Digital Transformation at BME, noted that:
“Blockchain technology enables us to become more time efficient, improve the operation and control of our system, while also providing legal certainty for electronically generated certificates, promoting privacy and compliance with the General Data Protection Regulation.”
If all goes as planned, BME and Renta 4 Banco plan to unveil the live version of the blockchain solution by the end of 2019.
New technologies like artificial intelligence, machine learning, blockchain technology, and others have shown they have the potentials to indeed revolutionize the world in the near future.
On March 12, 2019, BTCManager informed that tech giants IBM had partnered with CULedger to launch an Hyperledger-based blockchain solution for credit unions.