Euroclear to Develop Blockchain Gold Settlement System

Clearing and settlement services firm Euroclear has announced its first partnership with a blockchain industry business.

Belgium-based Euroclear revealed today it would partner with bitcoin exchange and blockchain services provider itBit to develop a system for settling gold trades. The project is aimed at reducing risk and increasing asset mobility and liquidity in the London gold market, and will find the two firms working in tandem to develop a "next-generation settlement service" that could be launched as soon as next year.

As part of the deal, Euroclear will act as the regulated entity for the planned product, while itBit will serve as a technology provider.

In interview, Euroclear product strategy and innovation lead Angus Scott described the effort as one of the first to seek to settle real assets using blockchain tech. However, he said that the project was attractive to Euroclear due to the fact it is in line with the company’s broader goal of pursuing efficiency.

Scott told CoinDesk:

“It’s a very genuine product. It’s one we’d be looking at irrespective of blockchain. Essentially we’ll take a lot of transactional friction out, create a common data set. The hypothesis we’re testing is that this is generally more efficient.”

Scott went on to discuss the wider emphasis that UK regulators have put on supporting improvements to the country’s financial infrastructure, which he said had a positive impact on Euroclear’s decision to move forward on the proposal.

He further pointed to the steps the company has taken to research and investigate the opportunities blockchain could bring, a process he said ended with the conclusion that the technology could be "potentially fundamental" to Euroclear’s business.

Scott acknowledged that the project is an ambitious one, but said that Euroclear felt itBit was the best partner given what he called the company’s competency and experience in capital markets.

Scott concluded:

"It’s never easy to bring market infrastructure change. You have to get the regulation right, the legal structure right, and you have to get people to move."

Gold image via Shutterstock