Spanish regulators, financial institutions collaborate on blockchain project

Maria Nikolova

The pilot test has shown that it is possible to reduce by more than 70% the time needed to register the issuing of warrants.

Blockchain seems to be gaining ground in Spain. Earlier today, the Spanish National Securities Market Commission (CNMV), BME and a number of financial institutions including Banco Santander, BBVA, BNP Paribas, CaixaBank, Commerzbank and Société Générale, announce they have been working together over the past year on a project called Fast Track Listing (FTL), which is based on blockchain technology.

The purpose of the joint endeavor is to simplify processes and cut the amount of time needed to register issuances. It has been proven that the use of blockchain technology can improve efficiency in terms of time and resources, as well as increase the security and traceability of processes.

The collaborative project involves the completion of a proof-of-concept test which consisted of the registration of an issuance of warrants. The test has proven that it is possible to execute the process in 48 hours compared with an average time frame of more than a week. Putting it otherwise, this is a reduction of over 70%, thanks to the connection of all the systems, automatic validation of requirements and their transparency.

Given these good results, CNMV has decided to continue exploring the possible applications of blockchain in its processes and to proceed further with the project. BME and all the national warrant issuers – BBVA, Caixabank and Banco Santander, along with international warrant issuers – BNP Paribas, Commerzbank and Société Générale, are also actively contributing to this project.

Other regulators, however, have remained cautious about the potential of blockchain. Earlier in June, for instance, Kit Malthouse, Conservative MP of the UK House of Commons, had to respond to a question asked earlier by Martin Docherty-Hughes ( of West Dunbartonshire) about the potential applications of blockchain. He asked the Secretary of State for Work and Pensions, what recommendations were made to her Department as a result of the trials that GovCoin undertook on the use of blockchain technology for the welfare and benefits system; and whether the findings of those trails will be published.

Kit Malthouse answered:

“In 2016, DWP ran a trial proof of concept on a small scale and the findings concluded that it was not viable due to limited take up potential and the expenses it would incur. No other companies were involved in the trial and no benefit or personal data was shared with GovCoin (DISC) on claimants”.

The statement was in tune with the findings of experiments with distributed ledger technology (DLT) conducted by the Dutch central bank. The tests have shown that blockchain is not capable to respond to the needs of financial markets infrastructure. The biggest shortcomings are inadequate capacity, inefficiency due to high energy consumption and lack of complete certainty about having made a payment. Nonetheless, it appears that the resilience of a financial market infrastructure against external attacks could be increased by the use of blockchain technology, but this happens at the expense of capacity and efficiency.

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