Euroclear, EIB, Santander and EY to Pursue Blockchain Pilot for ECP Settlement

Euroclear, one of the world’s largest securities depositories, says it will push forward with building a pilot blockchain-based platform for the issuance and settlement of European commercial paper (ECP). The news was reported by EuroClear on June 19.

Euroclear settled €791 trillion ($885.48 trillion) in securities transactions and held an average of €28.8 trillion ($32.24 trillion) in client assets in 2018, according to results published this March.

The financial services titan has today revealed that it successfully completed a proof-of-value study for an ECP-focused blockchain platform together with the European Investment Bank, Spain’s Santander and “Big Four” auditor EY.

The blockchain platform will reportedly serve end-to-end for issuing and settling ECPs — unsecured short-term debt instruments issued by banks or corporations, which represent a $1.2 trillion market.

The press release notes that “based on the initiative’s success, Euroclear intends to move on to pilot phase soon.”

A disintermediated blockchain platform would provide time efficiencies by replacing cumbersome bilateral processing between market participants with a consolidated system, according to the press release. Euroclear has reportedly further outlined that:

“Other key benefits of this blockchain solution would be full transparency and traceability of ECP issuance related activities [...] making ECP same day issuance a new market standard.”

As reported, German financial services company Commerzbank, French corporate and investment bank Natixis, and Dutch financial services firm Rabobank jointly completed a live commercial paper transaction using the Euro Debt Solution application developed by enterprise blockchain consortium R3’s for its Corda platform.

Back in 2017, Eurcolear and blockchain trust company Paxos abruptly ended their joint cooperation on developing a settlement service utilizing blockchain technology for the London bullion market — despite having completed a series of successful tests.

Paxos has since released its own Ethereum (ETH) blockchain-based stablecoin, dubbed Paxos Standard Token (PAX).