The Spanish exchange holding Bolsas y Mercados Españoles (BME) has moved to the next stage of testing a system based on the Ethereum blockchain for financing small and medium enterprises.
According to BME, the pilot project was launched last year. Following some successful experiments, BME launched a new series of trials within the regulatory sandbox created by the Spanish Ministry of Economy and Digital Transformation. The creation of a special legal regime is aimed at the development of fintech and the latest technologies in the country, as well as at reducing the barrier to entry into these industries.
Investment firms and lenders took part in the first testing of the system. BME-managed Bolsa de Madrid, the Madrid stock exchange, announced its readiness to use blockchain to certify collateral back in March 2019.
In the second phase of testing, BME is going to test how effectively blockchain will allow limited liability companies to raise capital without resorting to traditional bank financing methods. The platform will also include a digital wallet where small and medium-sized businesses can store their assets, be they financial investment instruments or e-money. BME believes blockchain can significantly simplify trade finance, increase transparency and improve risk management.
Blockchain is increasingly being used in trade finance transactions. It is gaining popularity among both businesses and banks. In the past year, several large banks, including HSBC, ING and Citi, also began developing a similar platform, but on the Contour blockchain.
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