Bolsas y Mercados Espanoles (BME), Spain’s largest Stock exchange announced via a Press Release that the Ministry of Economic Affairs and Digital Transformation had admitted its SME financing blockchain to the regulatory sandbox environment on the back of successful pilot run back in 2020.
It will test a platform which aims to help Small and Medium sized enterprises to raise finances through issuing of participatory loans and convertible notes represented as digital assets in Ethereum blockchain network. The exchange will also publish a marketplace on which these digital tokens would be traded and an electronic wallet to store the loans and digital currency. The aim is to improve competition and reduce barriers to entry for participants. This trial is believed to involve businesses that form the landscape of the country’s SME financing ecosystem. BME stated:
“The platform is primarily aimed at facilitating the financing of Limited liability companies, which, in addition to their LLC status, face limited financing alternatives other than bank financing. In addition to the involvement of issuers and investors, Investment Service Firms play an important role in the platform, both in onboarding and validation processes and in the commercialization and management of issues.”
BME was acquired by Swiss Stock Exchange (SIX) for a reported $3.4 Billion in 2020. SIX has been investing heavily in blockchain based financial solutions, so it was only a matter of time before BME dipped their toe in to the domain. It launched its pilot test, which drew participants from Investment Servicing Companies and Business Credit providers, and it was executed successfully. The test presented a reduction in total times of end-to-end processes exceeding 80%. The distributed ledger technology shows improvement in the operation and control of the system. It also provides legal certainty for electronically generated certificates while also complying with GDPR by maintaining privacy.
Now, let alone the Small and Medium sized enterprises, even major Banks are looking in the direction of blockchain based technology to limit exposure to trade finance risks.
