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Spanish stock exchange BME enters SME blockchain finance network into sandbox

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Today Bolsas y Mercados Españoles (BME) announced that its SME financing blockchain was admitted to the regulatory sandbox by Spain’s Ministry of Economic Affairs and Digital Transformation.

By using a blockchain to tokenize participatory loans and convertible notes issued by SMEs, the BME aims to create a digital asset marketplace for alternative finance. This will act as a feeder for companies to optionally list on the BME Growth market.

The solution will also include an electronic money solution and an e-wallet to store both money and the loans as digital assets. A spokesperson told Ledger Insights, “we are closing an agreement with an electronic money entity that has a tokenized electronic money solution authorized in Spain/”

While blockchain is often envisaged as cutting out intermediaries, the BME is keen to involve investment services firms to help with onboarding and marketing the issues.

Entering the sandbox marks the second phase of the project after the BME ran a pilot with numerous firms in the summer of 2020.

The solution uses an enterprise blockchain Ethereum network, specifically Hyperledger Besu.

Meanwhile, the BME launched its first production blockchain network in 2019 for digital collateral pledges, Be DLT-Prenda. BME developed the solution internally at its DLT-Lab and it uses Hyperledger Fabric.

Last year, Swiss stock exchange SIX acquired the BME for €2.8 billion ($3.4 billion). Given that SIX has heavily invested in its SIX Digital Exchange, we can expect the BME to continue aggressively pursuing digital asset projects.

Update: the article was updated with Hyperledger Besu and the electronic money details