BNP Paribas Securities Services is looking to expand its blockchain platform for private stocks in a bid to help private companies issue minibonds via crowdfunding platforms.
As part of the initiative, BNP is working on a distributed ledger that will register all minibonds issued via the platforms and will record all related transactions and changes of ownership.
In addition, the custodian bank has signed agreements with crowdfunding firms Lendosphere, Enerflip and Lumo.
The venture comes in response to a call from the French government encouraging private companies to issue minibonds via crowdfunding platforms, as well as a call for introducing distributed ledger technology as opposed to existing individual ledgers in a bid to ensure authenticity of transactions.
“Blockchain technology is particularly suited to the fundraising needs of private companies as transactions volumes are typically lower than for listed companies,” said Marc Younes, head of business management at BNP Paribas Securities Services’ Innovation & Digital Lab. “This technology could also serve to standardise processes around the trade lifecycle of minibonds.”
Blockchain technology has been hailed by custodians as the future of the industry with potential to streamline processes such as settlement, clearing and corporate actions.
Last week US blockchain firm Ripple revealed that it had raised $55 million in funding from investors including Standard Chartered, Accenture and SBI Holdings, taking its total funding to over $93 million.