BME participates in all design and testing of DLT technology

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BME participates in all design and testing of DLT technology

BME, through Iberclear, has been admitted as a DLT market operator in the Eurosystem’s exploratory work to carry out tests on new technologies applicable to wholesale operations in central bank money. Jesús Benito, CEO of Iberclear, tells us about it.

What does the Eurosystem test program that BME entered into with Iberclear consist of?

The Eurosystem’s experimental program is based on the assumption that a new technology, such as DLT or distributed ledgers, can increase the efficiency of the European post-trade trading system. Basically it has two possibilities, two tests to be done: one is the delivery and settlement of securities against money, in which Iberclear participates, the other is money against payment, one currency of another currency; It has two windows in which we will participate in the second testing window from September to December, and it has three potential DLT platforms, namely Bank of France, Bundesbank and Bank of Italy. We are participating with the Bank of France as consultants to help us in this process, along with Iberpay and Deloitte. We have the participation of 10 defenders in the experiment, because in principle it can be done in reality, but we have chosen the experiment to have the 10 most important defenders in the Spanish scene.

What is the plan for BME?

We are participating in both the design and testing process of this new DLT technology for the future, which will represent a total shift in the paradigm of the ecosystem and post-contract infrastructure in the long term. We participate in this and many other projects, but there are also some use cases that we believe could improve some of these processes; It’s not about a total change, but about advancing some of these processes or using some assets or new assets that are subject to this new distributed ledger system.

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How Can DLT Technology Change Post-Contract Business?

We believe that new DLT technology can bring greater efficiency and greater agility at lower costs. It has its limits in terms of some measure of the information it has to process, but we believe it will be imposing in the long run; At BME we work on specific use cases. In 2022, we will issue a real digital bond on Iberclear, and even Group Six in the Swiss region, which already has an infrastructure approved by Figma, a depository center for bonds in DLT and CST, as a trading platform in DLT and CST. DLT.

What are Iberclear’s priorities now?

In addition to all that we are working on in this experimental project with EuroSistema, we have to implement two major regulatory projects at Iberclear in the short term. This year in November 2024, we have to implement the Eurosystem collateral management system with SCORE standards; It is a European-wide program led by the European Central Bank’s EuroSistema, which deals with the development and coordination of monetary policy, and is the most important program across Europe. Then, in March 2025, we will implement what we call Reform 3 of the Spanish post-contractual system, a purely domestic project that responds to the requirement of the new Securities Markets Act approved in March 2023. We must now thoroughly modernize, the last step in harmonizing Spain’s post-Treaty system with all our other European countries.

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