Spanish bourse BME has completed tests of the use of blockchain technology to eliminate the exchange of physical certificates for collateral pledges.
Working with BME Clearing, the Spanish central securities depository Iberclear and Renta 4 Banco as the pilot firm, the bourse says proof 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 concept was conceived and nurtured by BME’s DLT-Lab, established to explore potential innovations in capital markets processing through the use of blockchain technology.
Berta Ares, head of digital transformation, BME, says: "DLT 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".
He adds that BME and Renta 4 Banco will keep working on the developments necessary to allow the system to go live by the end of 2019.