Euroclear develops blockchain solution for commercial paper with Banco Santander, EY and European Investment Bank

Euroclear, Europe’s biggest settlement house for securities, has announced that is developing an end-to-end blockchain solution for the issuance and settlement of European Commercial Paper (ECP).

The solution is being developed in collaboration with the European Investment Bank (EIB), Banco Santander, and EY. The objective is to provide one consolidated hub for the issuance of ECP with delivery versus payment (DVP) settlement by Euroclear.

In its press release, Euroclear said that the proposed solution will help cut down on the current time-consuming bilateral processing between multiple market participants. In addition, it is expected to bring full transparency and traceability to ECP issuance related activities, reduce operational costs and true time optimisation, and make 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. Our ambition is to deploy an efficient blockchain powered solution that supports further growth of intra-day issuance for ECP markets,” Edwin De Pauw, Head of Data Services and Innovation, Euroclear Group said.

Last year, EIB organized a blockchain hackathon which aimed to explore blockchain technologies to redesign the transaction processing of commercial paper.

A team from EY won the contest with an innovative solution to improve transactions using a combination of blockchain, robotics and business artificial intelligence tools to optimise the issuance process and reduce the number of exchanges between the EIB and its counterparties while maintaining each one’s role within the ecosystem.

“Following EY winning the EIB Blockchain Challenge, we are pleased to validate our solution on a larger scale. Further development of this innovative blockchain case is in line with our commitment to consistently bring more value to the business through innovation,” Angel Pavlov, Senior Manager, EY and designer of this solution, said.

Based on the success of the initial phase, Euroclear plans to move to the pilot phase soon. It said that other ECP issuance institutions have expressed interest and will be invited to participate in the pilot phase.