The Spanish stock exchange got prepared to test its blockchain-based SME financing system. The stock exchange is moving forward with further tests according to the plan.
Bolsas y Mercados Espanoles Spanish stock exchange, also called as BME. BME is ready to test its blockchain infrastructure for small and medium-sized enterprise financing. These tests are following a successful pilot run back in 2020.
According to Finextra, BME’s next set of trials will involve businesses that are part of the country’s SME financing ecosystem. Moreover, the companies should fall under the aegis of the regulatory sandbox. Spain’s Ministry of Economic Affairs and Digital Transformation created it.
According to Cointelegraph’s previous report, this sandbox is an essential step in promoting greater fintech development in Spain. In addition, this helps to improve greater competition while reducing entry barriers for participants.
The BME will look at the suitability of the Ethereum-based system in raising capital for limited liability companies outside the usual traditional bank financing root. However, the BME’s blockchain platform is aiming to facilitate SME financing digital assets.
The assets represent funding avenues like convertible notes and participatory loans. Thus, this project marks a further extension of the BME’s digitalization policy of recent times.
The Spanish stock exchange already completed the pilot testing of its blockchain-based system. BME did the testing for the electronic certificates of collateral pledges back in March 2019.
In addition, the blockchain platform is going to include a digital wallet for the SME financing project. This helps SMEs to store their assets, including financial investment instruments and electronic money.
Moreover, Chokepoint’s trade finance is another touted use case for blockchain. It has the decentralized ledger technology Solutions being bootstrapped to eliminate significant points affecting SME financing.
Several major banks are also looking towards blockchain technology apart from SMEs to limit exposure to trade finance risks.