London
11 April 2017
Reporter: Stephanie Palmer

Euroclear Bankchain goes for gold with second successful pilot


Euroclear and Paxos have completed a second pilot of their Euroclear Bankchain settlement service for the London bullion market, executing over 100,000 settlements.

The two-day pilot including 16 market participants including the likes of Citi, Société Générale and Barrick Gold Corporation. The service is due to go live later this year.

Euroclear Bankchain is intended to combine Euroclear’s capabilities as an international central securities depository and settlement provider with Paxos’s existing blockchain platform.

It is designed to bring instant settlement and delivery-versus-payment to the London bullion market, minimising risk, and reducing capital charges and balance sheet constraints.

The first pilot was completed in December 2016, when the platform settled 600 over-the-counter test bullion trades over a two-week period.

Since then, Euroclear and Paxos have continued to work with the London bullion market for testing and feedback.

Seth Phillips, Bankchain product director at Paxos, commented: “It has been exciting to watch the growth of the Euroclear Bankchain pilot program over the last month.”

He added: “We doubled the number of firms and significantly increased interaction as participants were spread across six countries and four time zones. Most importantly, we’re proving that the platform can deliver lower costs and lower risk for the London gold market.”

Angus Scott, head of product strategy and innovation at Euroclear, said: "We are encouraged by the extensive engagement of market participants in this second pilot and will continue as we further develop this new market infrastructure for the bullion market.”

“The feedback provided is of great importance to make sure that our service will deliver real added value to the London bullion market through transparency, capital reduction and delivery versus payment settlement."

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