The companies are planning to bring instant settlement and simultaneous delivery versus payment to the London bullion market.
Euroclear has completed its first pilot trades to adopt the blockchain technology for the London bullion market in 2017.
Euroclear, a leading provider of post-trade services, reveals the details of its pilot. More than 600 OTC test bullion trades were settled on the Euroclear Bankchain platform within two weeks. The test run included such prominent market participants of the London bullion market as Scotiabank, Société Générale, Citi, MKS PAMP Group and INTL FCStone. All the companies form the Euroclear Bankchain Market Advisory Group that totally unites 17 participants partnering Euroclear and Paxos, the blockchain platform provider that focuses on revolutionary blockchain solutions for global financial institutions, in the roll-out of the new service. The Group was launched in June this year.
Bankchain, a cloud-based platform-as-a-service solution, transforms post-trade market infrastructures and back office processes for customers. Paxos CEO Charles Cascarilla explains: “Increasingly, the financial services industry is embracing the transformative potential of blockchain technology. Paxos is making that potential a practical reality. The collaboration with Euroclear to create a trusted blockchain settlement infrastructure for gold is just the beginning, and an important first for the industry.”
Initially, Bankchain used to be recognized under the itBit umbrella, but later became established as an offering under the Paxos brand.
Euroclear and Paxos expect Bankchain platform to bring instant settlement and simultaneous delivery versus payment to the London bullion market, thus reducing risk and capital charges incurred under the current process.
Angus Scott, director, product strategy and innovation at Euroclear, says that they are planning to fulfil another market simulation at the beginning of next year.
“This is a real first step in bringing a new settlement capability to the London bullion market that will help lower risk and simplify the post-trade process”, he says.
Euroclear has been providing post-trade services for more than 60 years. The company is working with leading financial institutions helping settling domestic and cross-border securities transactions, safekeeping investments and managing the risks and exposures arising from transactions. The team of professionals based in Europe, Asia, the Middle East and the Americas aim at providing personalized support.
The Euroclear group includes Euroclear Bank which is rated AA+ by Fitch Ratings and AA by Standard & Poor’s as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland. Euroclear holds total assets in the value of €27.5 trillion. Annually, the Euroclear group settles securities transactions valued at €675 trillion.