London Stock Exchange Group PLC’s (LSE) Italian subsidiary, Borsa Italiana, is developing a blockchain-based process for small companies to issue securities that aims to enhance access to markets and investors.
The exchange and technology giant IBM announced on Wednesday that they’re working on blockchain-based securities data system that would digitize the issuance of securities for small- and medium-sized European enterprises (SMEs).
The new system aims to replace the existing paper-based system with a shared, digital registry to record all shareholder transactions that, they say, will open new opportunities for trading and investing.
“Through our work with IBM on this blockchain solution, Borsa Italiana is taking the lead in transforming the way European SMEs can manage their shareholder data and at the same time expand credit access — all on a trusted digital platform,” says Raffaele Jerusalmi, CEO of Borsa Italiana, in a statement.
The system, which is undergoing an initial test phase, is designed to enable the sharing of highly sensitive securities data while remaining secure and gated, the firms say. The goal is to give SMEs better access to credit and to link them to “a broader and more mature investor ecosystem, enabling them to set up new trading networks and obtain funding by sharing financial data in a security-rich and transparent public arena.”
“Sharing secure and transparent critical network data across shareholder networks is difficult using traditional system,” says Marie Wieck, general manager of IBM Blockchain, in a statement. “Blockchain is poised to help remove some of these barriers in traditional methods for the transfer of value — much as the Internet did for the exchange of information in the late 1990s.”
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