The London Stock Exchange (LSE) subsidiary Borsa Italiana has announced plans to digitize securities certificate data with the adoption of IBM Blockchain.
The partnership between LSE and IBM will give small private European companies the opportunity to interact with shareholders and vice versa. It will also simplify the tracking and management of information by recording all shareholder transactions.
Commenting on the deal to Bitcoin Magazine, Ed Clark, senior press officer at the LSE, said, “It has the potential to allow private SMEs [small- and medium-sized enterprises] to replace the paper-based system that currently exists that is both opaque and inefficient. Greater transparency could lend itself to trading opportunities in the future.”
Clark stressed that the development with IBM was initiated by the Italian subsidiary, adding, “This was a business-led initiative that came from Borsa Italiana — not built by LSE tech guys and then applied to a business-case, bottom-up approach.”
The solution is undergoing an initial test phase with a small group of LSE partners and clients. So far, the move is being met with approval by blockchain and exchange specialists.
Patrick Young, executive director of DV Advisors, an advisory company for exchanges, told Bitcoin Magazine, “The LSE deploying blockchain [technology] for private company data management makes eminent sense. It’s a simple first-level deployment as opposed to a radical shift involving retirement of legacy non-DL [distributed ledger] technology.”
This blockchain solution, developed in collaboration with IBM, is built on highly secure infrastructure technology with the highest levels of encryption commercially available.
The LSE is not the first European exchange to announce the use of blockchain technology. This year there have been a number of European banks that have said they are using blockchain-based trade finance for SMEs. This includes the ...