One of the largest Belgium-based settlement houses is seeking to modernise the trading in precious metals in partnership with U.S. bitcoin exchange itBit.
As the Financial Times reports, Euroclear, which works with different kinds of financial assets of the total amount of more than € 27 trillion, intends to study the perspectives of creating a new settlement system for London gold market. The settlement house will try to adopt the itBit’s blockchain-based clearing and settlement network Bankchain for gold trade.
Until recently, Euroclear was rather sceptical about all the hype around the attempts to employ the blockchain for the needs of capital markets. It considered the benefits of distributed ledger not convincing enough comparing to expanded role of a central securities depository.
However, according to Euroclear’s director of product strategy and innovation Angus Scott, settlement of unallocated gold has always been capital-intensive for banks and, therefore, modernising the process is in the interest of the market.
“We have also created an advisory group, which recently convened to discuss the building of the new service with the ambition to make the London bullion market more efficient,” said he.
As of now, Euroclear and itBit discuss the creation of a blockchain network with banks and brokers. This network will be able to clear, track and settle trades almost in real time.
“Gold also has a big enough market to want to track the ownership. It’s a market that recognises it needs to change, it’s a bilateral, decentralised market. It’s a market in which a distributed ledger can have an immediate benefit,” said Chad Cascarilla, founder and CEO of itBit.
itBit became the first bitcoin exchange to operate legally in the US under a license from the New York Department of Financial Service (NYDFS). On 7 May 2015, it introduced itBit Trust Company, the organisation to become a custodian for its clients’ assets. Creation of the trust was overseen by the NYDFS, which carried out a comprehensive review of the company’s AML practices, security standards, and capitalisation structure. By creating a trust company, itBIT attained a bank-like status to guarantee its customers a new level of security.
Anna Lavinskaya
