Seven major financial institutions announced the development of post-transaction blockchain technology, making it easier for SMEs to obtain development funds

Seven financial institutions have joined forces to explore how blockchain technology can help reduce the costs of providing post-trade settlement services to small and medium-sized enterprises (SMEs).

BNP Paribas Securities Services, AIF, Euroclear, Euronext, S2iEM, Societe Generale and Paris Eurofinancial Markets announced today that they have signed a memorandum of understanding to develop the project. By reducing the cost of post-trade services, the groups say SMEs will be able to better access capital markets for financing.

They also plan to form an independent company dedicated to designing, developing and deploying blockchain technology for other international post-trade partners.

In recent months, financial institutions around the world have been collaborating and joining consortiums to develop various blockchain infrastructures for banking systems.

Blockchain activity has also been high in France, where 11 financial services firms announced a similar partnership in December to assess the ethical and regulatory implications of the technology.

This collaboration is further evidence that permissioned blockchains will succeed, and that institutions that were once competitors will now have to collaborate.

The groups released a joint statement saying:

“By channelling our efforts into this groundbreaking area, we are focusing on new solutions that will make it easier for SMEs – a vital force for economic growth in Europe – to access the capital they need.”

The group believes that the execution speed, low cost and security provided by blockchain are key factors in enabling the project to proceed.