The Memorandum of Understanding signed by the financial institutions is aimed to help small and medium businesses by developing a post-trade infrastructure and creating “a new regulatory environment” in France.

The signatories to the Memorandum include two largest French banks, BNP Paribas and Société Générale, together with state-run Caisse des Dépôts and four other French-based and European financial organisations – Euroclear, Euronext, S2iEM and Paris Europlace. According to the press release published by Businеss Wire, the main objective of the parties is to join forces to augment the financing capacity and expertise and to promote innovation based on the blockchain.

The distributed ledger will be used to design, develop and implement innovative solutions for post-trade processing. The companies state that the “blockchain technology has the potential to significantly enhance and streamline post-trade operations… allowing fast execution of trades with clearing & settlement in real time.” It is expected that the new solutions would reduce transaction costs, enhance speed and preserve security, helping small and medium-sized businesses:

“By pooling our strengths in this ground-breaking area, we are focusing on new solutions that will give small and mid-sized companies – key actors for growth in Europe – easier access to the financing they need. With this project, we are securing the means to seize opportunities that blockchain distribution can offer: speed of execution, low cost and security.”

The work on new solutions will be carried out through a new, independent company, says the press release, although, no details about this future company are yet disclosed.

The Memorandum is expected to contribute to “a new regulatory environment in France that allows the issue and circulation of securities using blockchain technology.” However, it is not legally binding. The companies warn that the press release is being published “for information purposes only,” while any assumptions made in the document “may prove to be incorrect in the future and are dependent on risk factors.”

Alexey Tereshchenko