The Spanish stock exchange Bolsas y Mercados Españoles (BME) has announced that they will be introducing a regulatory sandbox for blockchain-based financing of small to medium-sized enterprises.
🗞️The #sandbox admits a #blockchain-based #SME financing platform by BME. The project envisages the creation of a platform that facilitates the financing of small and medium-sized companies through the issuance of digital tokens. ➡️https://t.co/1YXL3t7bQ8 pic.twitter.com/GDoU6jjAcE
— BME (@GrupoBME) May 14, 2021
Regulatory Sandbox will facilitate SME financing
According to BME’s press release, the Ministry of Economic Affairs and Digital Transformation is creating a safe testing environment for the transformation of the financial system. This will allow small to medium-sized businesses to issue tokenized participatory loans and convertible notes on the Ethereum blockchain.
For this purpose, the stock exchange will release a marketplace where these tokens can be traded, as well as an e-wallet to store both digital money and tokenized financial instruments. As BME states:
The platform is primarily aimed at facilitating the financing of limited liability companies, which, in addition to their size, due to their status as LLC, face limited financing alternatives other than bank financing. In addition to the participation of issuers and investors, investment services firms (ESIs) play an important role in the platform, both in the onboarding and validation processes and in the marketing and management of issues.
No stranger to Blockchain Technology
Last year, BME was acquired by the Swiss stock exchange SIX for a sum of 3.4 billion USD, which heavily invests into blockchain-based Fintech solutions. Shortly after the merger, BME started a first pilot test of their SME financing platform.
BME started to experiment with blockchain technology already in 2019, with the project Be BLT-Prenda. The platform, which was built on Hyperledger Fabric technology enabled the issuance of digital collateral pledges. For the financing platform, which will now enter the second phase of testing, BME draws on the Linux Foundation’s blockchain suite once more. The platform is based on the Ethereum client Hyperledger Besu.