This week, Rabobank announced it completed its first real-time Euro Commercial Paper transactions using blockchain technology in a pilot in the Netherlands with Commerzbank and Euroclear.
Dutch investors NN Investment Partners and PGGM joined Rabobank Markets in the recent initiative. The project involved multiple €1 million one-week maturity commercial papers. Payments were recorded instantly on the Euroclear Bank’s infrastructure. Rabobank has been working on the pilot for two years, and the successful completion of the trial means it will look to offer the service across Europe.
Blockchain technology offers the security and efficiency of instant settlement instead of the standard two business day lag. While previously investors had to wait for payment if they sold the commercial paper, cash can now be managed in real-time. Successful development will enhance intraday liquidity for both investors and companies. It is hoped that using new technology will help businesses standardize and better manage cash flow and portfolio risk.
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