Euroclear and Paxos pilot blockchain gold settlement

Euroclear and Paxos pilot blockchain gold settlement

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Post-trade giant Euroclear and blockchain firm Paxos have completed the first pilot for Euroclear Bankchain, the new blockchain settlement service for London bullion.

Over 600 over-the-counter (OTC) test trades were settled on the platform over the course of a recent two-week pilot.

Scotiabank, SocGen, Citi, MKS PAMP Group and INTL FCStone were all involved. 

Each firm is part of the advisory group working on the roll-out of the new service, due to go live in 2017.

The system aims to minimise gold settlement risk using blockchain technology, leading to a reduced capital charge and reduced balance sheet constraints.

"The pilot has been very useful in helping us further refine the Bankchain platform," said Seth Phillips, Bankchain product director at Paxos. 

"The level of engagement from market participants was extensive and they were excited by settlements enabled on a real blockchain for the first time and to see how quickly their feedback could be incorporated into the platform."

Angus Scott, director, product strategy and innovation at Euroclear added: "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."

Another market simulation will run early next year in preparation for a production launch later in 2017.

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