London Stock Exchange-owned Borsa Italiana and IBM are using blockchain technology to digitise the issuance of securities for SMEs in Europe.
The project is designed to digitise securities certificate data, replacing the paper commonly issued to private companies today. By creating a distributed shared registry containing a record of all shareholder transactions, the system promises a more streamlined and transparent process, giving various parties - including issuers, regulators and investors - increased insight into company information.
Traditionally, private SMEs lack access to public stock exchange networks or formalized credit structures. By using the blockchain system, Borsa Italiana is aiming to give these firms better access to credit and a link into a broader and more mature investor ecosystem, enabling them to set up new trading networks and obtain funding by sharing financial data in a security-rich and transparent public arena.
"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," says Raffaele Jerusalmi, CEO, Borsa Italiana.
Built on Hyperledger Fabric version 1.0, the system is designed to help ensure that highly sensitive securities data can be shared amongst permissioned network participants while remaining secure and gated. The tech is built for interoperability with the LSE's existing systems and is already undergoing a test phase with a small group of partners and clients.
Marie Wieck, GM, IBM Blockchain, says: "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."