The Spanish stock exchange is ready to test a blockchain-based financing system for SMEs

The Spanish exchange Bolsas y Mercados Españoles (BME) is ready to test its blockchain infrastructure for financing small and medium-sized businesses after a successful pilot run in 2020.

As reported by Finextra on Friday, This next series of BME trials will involve companies that are part of the country’s SME finance ecosystem, under the auspices of a regulatory testing environment.or created by the Spanish Ministry of Economy and Digital Transformation.

As Cointelegraph previously reported, This sandbox environment is seen as an important step in promoting further fintech development in Spain, with the aim of improving competition while lowering the barriers to entry for participants.

The Spanish stock exchange is ready to test a blockchain-based financing system for SMEs
The Spanish stock exchange is ready to test a blockchain-based financing system for SMEs

Investment service providers and commercial loan providers took part in the aforementioned pilot phase in 2020.

During the second round of testing, BME will likely attempt to assess the suitability of the Ethereum-based system of raising capital for limited liability companies outside of the traditional bank financing route.

Indeed, BME’s blockchain platform is designed to make it easier for SMEs to finance digital assets, which represent funding options such as convertible bonds and equity loans.

The project marks a new extension of BME’s digitization policy in recent times. In March 2019, the Spanish exchange completed the pilot of its blockchain-based system for electronic security certificates.

For the SME financing project The blockchain platform will also include a digital wallet for SMEs where they can store their assets, both financial investment instruments and electronic money.

Trade finance is another touted use case for blockchain that introduces decentralized ledger technology solutions to remove significant bottlenecks that affect SME finance.

In addition to SMEs, major banks are also using blockchain technology to limit the risk of trade finance risks.

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