BNP Paribas Securities Services (BNPPSS) aims to use blockchain technology to issue mini-bonds for small French firms.
BNPSS, which offers custody banking and investor services as well as services to issuers of securities, intends to issue the mini-bonds on crowdfunding platforms by the end of the year.
The bank is working in partnership with renewable energy crowdfunding specialists Lendosphere, Enerfip and Lumo.
BNPPSS said the move followed a French government initiative to allow private companies to issue mini-bonds via crowdfunding platforms. The government is also encouraging crowdfunding companies to consider using distributed ledger technology, rather than existing individual ledgers, to ensure the authentication of transactions.
As part of the partnership, BNP Paribas Securities Services is working on a distributed ledger that will register all mini-bonds issued via the platform and record all related transactions and changes of ownership. The bank said issuers and investors will benefit from a “standardised process, which will ensure financial transactions are performed quickly, efficiently and securely”.
This latest partnership follows BNP Paribas Securities Services’ announcement in April that it was working on a platform designed to enable private companies to issue shares on the primary market and ultimately give investors access to the secondary market using blockchain technology.
Marc Younes, head of business management at BNPPSS innovation and digital lab, said: “Blockchain technology is particularly suited to the fundraising needs of private companies as transactions volumes are typically lower than for listed companies. This technology could also serve to standardise processes around the trade lifecycle of mini-bonds.”
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