Investment Operations

Blockchain Settlement Solution for European Commercial Paper in the Works

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European Investment Bank (EIB), Euroclear, Banco Santander, and EY confirmed today that they have been working together on an end-to-end blockchain solution for the issuance and settlement of European Commercial Paper (ECP).

According to a joint statement, the proposed blockchain solution will reduce time-consuming bilateral processing between multiple market participants, providing one efficient consolidated hub for the issuing of ECP with DVP settlement by Euroclear.

Other key benefits of this blockchain solution, according to Euroclear, would be full transparency and traceability of ECP issuance related activities; a reduction in operational costs and true-time optimisation, making ECP same day issuance, a new market standard. “Our ambition is to deploy an efficient blockchain-powered solution that supports further growth of intra-day issuance for ECP markets,” said Edwin De Pauw, Head of Data Services and Innovation, Euroclear Group.

John Whelan, Head of Digital Investment Banking, Banco Santander, said that this proof of value further validates the potential impact of blockchain technology on the securities issuance process. “There is a huge opportunity there to introduce efficiencies, reduce time-to-market and improve the experience for issuers and investors,” Whelan said.

Based on the initiative’s success, Euroclear intends to move on to pilot phase soon, confirming that other ECP issuance institutions have expressed interest and will be invited to participate in the pilot phase.