EIB, Euroclear, Banco Santander and EY to Introduce Pilot for ECP Settlement

UTC by Julia Sakovich · 3 min read
EIB, Euroclear, Banco Santander and EY to Introduce Pilot for ECP Settlement
Photo: Euroclear

Euroclear in cooperation with EIB, Santander and EY will push their blockchain-based platform for the issuance and settlement of European commercial paper to a pilot phase.

One of the major securities depositories in the world, Euroclear, has announced the successful completion of a proof of value study for a pilot of a new blockchain-based platform. The platform is intended for the issuance and settlement of European commercial paper (ECP).

According to the information revealed, in 2018, the Euroclear group managed to settle the equivalent of $885.48 trillion in 230 million domestic and cross-border securities transactions. And an average amount of client assets held is nearly $32.24 trillion.

On the development of this platform, Euroclear has been working in close cooperation with the European Investment Bank (EIB), Spanish bank Santander and “Big Four” auditor EY.

Benefits of the Proposed Solution

Thanks to the new solution it will be possible to facilitate and streamline the entire process of work with ECP. Now all the related procedures are extremely time-consuming, as they presuppose the involvement of many market participants. The platform will represent itself one consolidated hub for the issuing of European commercial paper with DVP settlement provided by Euroclear.

But time-efficiency is not the only advantage of this solution. It will also ensure the highest level of transparency and traceability of all activities related to ECP issuance. Moreover, it will allow making operational costs much lower while optimizing the entire process. As a result, the platform will be able to set a new market standard via ensuring the same day ECP issuance.

Speaking about a successful proof-of-value, Edwin De Pauw, Head of Data Services and Innovation, Euroclear Group noted:

 “We are delighted to have completed this proof of value with our partners and excited by the innovation opportunities it creates. Our ambition is to deploy an efficient blockchain powered solution that supports further growth of intra-day issuance for ECP markets.”

As John Whelan, Head of Digital Investment Banking at Banco Santander noted, this proof of value helped to demonstrate what benefits blockchain technology can bring to the securities issuance market. This sector currently needs a solution that will be able to “introduce efficiencies, reduce time-to-market and improve the experience for issuers and investors.” And blockchain can become just an appropriate tech to do it.

According to the company’s statement, given the successful results, the next logical step will be to proceed to a pilot stage. It is known that other ECP issuance institutions have also expressed their interest in this initiative. That’s why Euroclear will invite them as participants for the pilot phase.

It’s not the first Euroclear’s experience of work with blockchain. In 2017, it was working with blockchain trust company Paxos on the development of a settlement service. Nevertheless, despite the fact that the companies managed to conduct a row of successful tests, they unexpectedly ended their work without presenting a final result.

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