Euroclear leads joint blockchain initiative European CP market

The proposed solution will provide one consolidated hub for the issuing of European commercial paper with delivery vs payment (DvP) settlement.

By Richard Schwartz

European Investment Bank (EIB), Euroclear, Banco Santander, and EY have together developed an end-to-end blockchain solution for the issuance and settlement of European Commercial Paper (ECP).

The proposed solution will provide one consolidated hub for the issuing of ECP with delivery vs payment (DvP) settlement by Euroclear.

The aim is to reduce time-consuming bilateral processing between multiple market participants and ensure full transparency and traceability of ECP issuance related activities, making ECP same day issuance a new market standard.

“We are delighted to have completed this proof of value with our partners and excited by the innovation opportunities it creates,” said Edwin De Pauw, head of data services and innovation, Euroclear Group. “Our ambition is to deploy an efficient blockchain powered solution that supports further growth of intra-day issuance for ECP markets.”

John Whelan, head of digital investment banking at Banco Santander, said the proof of value further validates the potential impact of blockchain technology on the securities issuance process. “There is a huge opportunity to introduce efficiencies, reduce time-to-market and improve the experience for issuers and investors,” he commented.

Euroclear intends to move on to pilot phase soon, where other ECP issuance institutions that have expressed interest will be invited to participate.