Blockchain: IBM and London Stock Exchange Group team up for securities data project

The group's Italian subsidiary will be the first to test the technology for digitising certificate data.

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Image: Manakin, Getty Images

Borsa Italiana, the Italian subsidiary of the London Stock Exchange Group (LSEG), says it is using IBM Blockchain to help European SMEs access credit and link into digitising certificate data.

Traditionally, smaller companies do not have access to public stock exchange networks or formalised credit structures, but the plan is for Borsa Italiana to help smaller companies trade and operate more easily in the exchanges.

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The IBM blockchain solution for unlisted SMEs in Europe is designed to replace the paper trading certificates that are usually issued to private companies. "With a more digitized, streamlined and transparent process enabled by the blockchain solution, various parties -- including issuers, regulators and investors -- will have increased insight into company information," said IBM.

Using the blockchain technology, Borsa Italiana is hoping to change how unlisted companies in Europe can exchange and bring greater transparency around shareholder data and, at the same time, expand their access to credit.

Borsa Italiana is the latest in a series of stock exchanges that will be using IBM Blockchain.

IBM sees blockchain as a key building block in its future security plans. On Monday the company said that it aims intends building six IBM Cloud Blockchain data centers with IBM Z mainframes as the encryption engines. They will be launched in New York, London, Frankfurt, Sao Paolo, Tokyo, and Toronto.

Last month, seven major European banks said they would be using Blockchain-based trade finance for SMEs and in another announcement, American International Group and Standard Chartered Bank announced that they were piloting what they believe is the first multinational, "smart contract" based insurance policy using blockchain.

Built on IBM's Hyperledger Fabric version 1.0, which is a blockchain framework and one of the Hyperledger projects hosted by The Linux Foundation, the system is designed to help ensure that highly sensitive securities data can be shared amongst "permissioned network participants" while remaining secure and gated. This blockchain solution is built on a secure infrastructure technology, "with the highest levels of encryption commercially available", said IBM.

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