The Stock Exchange from Spain Plans to Test SME Financing System Based on Blockchain
According to the latest reports, the stock exchange from Spain is in the process of going through the testing of its blockchain infrastructure. The name of the stock exchange is Bolsas y Mercados Espanoles, which is commonly known as BME.
The blockchain infrastructure it has in place is for the financing purposes of enterprises that are small and medium in size. These enterprises need support in the beginning, as they are startups and need financial support.
The Spanish stock exchange “BME” has decided to proceed with testing its infrastructure after the successful pilot. The firm had reportedly carried out a successful pilot for its SME financing system on the blockchain back in 2020. Finextra shared details around the testing of the system on Friday, May 14.
The firm announced that the businesses taking part in the upcoming tests and trials would be the ones that are part of the SME financing ecosystem in the country.
The ecosystem for SME financing would be tested through the regulatory sandbox. The sandbox is the creation of the Ministry of Digital Transformation and Economic Affairs from Spain.
In the sandbox, the firms get the opportunity to run their project just like they would do it in real-time. However, in the sandbox, everything is in dummy mode. In this environment, the firms can run their processes to find any flaws or processes that need fixing.
They can test their regulatory compatibility and asset the market condition of their project. Throughout the process, the regulatory is informed and they keep collecting the data around the company’s project as well. Once the allocated time period is over, the regulatory checks the results and confirms whether the project is approved or rejected.
According to many analysts, it is a very productive and significant step that the Spanish stock exchange has taken. This would eventually prove one of the best steps taken by the Spanish regulators in the advancement of the fintech sector.
This would give birth to an environment that would be competitive and would urge companies to compete in order to gain prowess and supremacy over others. With the new development, more firms will be able to participate and acquire certifications, proving their authenticity.
The initial pilot that the Spanish stock exchange carried out saw the participation from entities such as business credit providers and investment servicing companies.
In the second round, it is expected that the BME would carry out testing through the Ethereum network. The BME would look forward to raising capital through the Ethereum-based system.
This way, the BME would be able to establish whether the companies would be able to benefit as much as they would do from the traditional financing system.