French Bank BNP Paribas, one of the largest banks in the world, has signed a partnership agreement with crowdfunding providers Lendosphere, Enerfip and Lumo. The bank aims to allow private companies issuing mini-bonds through a private blockchain.
BNP Paribas is developing a distributed ledger based on the blockchain technology at its new digital lab. The ledger is expected to maintain a record of all mini-bonds issued through the platform, as well as all of the changes in their ownership.
According to BNP Paribas, the blockchain can ensure more secure, faster and more efficient transactions. The bank is planning to present a new platform by the end of 2016 after a pending French law on mini-bonds receives final approval.
“Blockchain technology is particularly suited to the fundraising needs of private companies as transactions volumes are typically lower than for listed companies,” BNP Paribas Securities Services Innovation & Digital Lab Manager Marc Younes said in a statement. “This technology could also serve to standardise processes around the trade lifecycle of mini-bonds.”
The initiative of BNP Paribas demonstrates its strong intention to expand in the blockchain space. This includes the launch of a FinTech laboratory at the New York headquarters of the bank. The laboratory was opened at the beginning of September. It works to apply blockchain solutions to employee problems. The FinTech lab takes 5,000 square foot on the 30th floor of BNP’s offices.
Six task forces are organized to work on AI and big data, in addition to blockchain. Bruno d-Illiers, BNP’s chief operating officer of commercial investment banking, emphasized that the laboratory is open to all the employees, not just management staff. “We don’t believe that innovation is just for the senior executives. We want to engage each and every staff member,” he said.
The laboratory team aims to provide correct information about the nature of such technology as blockchain. “Many people understand blockchain, but they don’t understand the impact it will have on our business model”, d-Illier stated.
BNP Paribas becomes a significant figure in the blockchain industry. It is a member of the European CDC initiative, the R3(CV) Consortium and the board of the ever-growing Digital Asset Holdings.
The bank has many initiatives in their early stages and hopefully even more ideas to be fulfilled in the future. The current partnership and development of the distributed ledger is planned for real-world trial by the end of the year, making it yet another milestone along the path of financial market blockchain revolution.