Euroclear recently completed its initial pilot test for Euroclear Blockchain, the company’s new London-based bullion settlement service. That two-week pilot involved major players in the London market like Citi, Scotiabank, MKS PAMP Group, and others, with more than 600 over-the-counter bullion trade transactions successfully settled using Euroclear Blockchain. The service meshes Euroclear’s settlement systems with the Paxos distributed ledger platform, and is the first of a planned series of products that the company plans to introduce to the gold markets.
According to Euroclear, this new platform is designed to facilitate instant settlement and delivery, reduce risk, and minimize the capital charges associated with the existing processes. Angus Scott, the company’s director of product strategy and innovation, said:
“This is a real first step in bringing a new settlement capability to the London bullion market that will help lower risk and simplify the post-trade process."
The plan now is for Euroclear and Paxos to evaluate the results and integrate the feedback as they prepare for their next market simulation sometime after the first of the year. At the present time, Euroclear Blockchain is expected to launch its live version at some point in 2017.
It's worth noting that the desire to use blockchain technology for bullion trading and settlement is gaining popularity. Already, CME Group and Royal Mint have partnered to build an investor platform that would allow the trading of gold bullion on the blockchain, with digital smart contracts that will be backed by gold deposits maintained at the Royal Mint vault.