BNP Paribas Securities Services is looking at letting companies issue mini-bonds on its blockchain technology platform.
According to a press release, the mini-bonds are for private company shares. BNP has hooked up with renewable energy crowdfunding companies Lendosphere, Enerfip and Lumo to let private companies issue the mini-bonds through the blockchain technology.
According to the company, the move follows the French government’s initiative that lets private companies issue mini-bonds via crowdfunding platforms. The government also wants crowdfunding companies to consider using distributed ledger technology, otherwise known as blockchain, rather than existing individual ledgers, to ensure the authentication of transactions. As part of the partnership with the crowdfunding companies, BNP Paribas Securities Services is working on a distributed ledger that will register all mini-bonds issued via the platform and record all related transactions and changes of ownership. The bank said issuers and investors will benefit from a standardized process, which will ensure financial transactions are performed quickly, efficiently and securely.
“We are delighted to be working on this exciting new initiative, which answers the French government’s call to make use of distributed ledgers to support the sale of mini-bonds via crowdfunding platforms,” said Marc Younes, head of business management at BNP Paribas Securities Services’ Innovation & Digital Lab, in the press release. “Blockchain technology is particularly suited to the fundraising needs of private companies as transactions volumes are typically lower than for listed companies. This technology could also serve to standardize processes around the trade lifecycle of mini-bonds.”
In April, BNP Paribas Securities Services announced it was working on a platform designed to enable private companies to issue shares on the primary market and, ultimately, give investors access to the secondary market using blockchain technology. This announcement is the first fruits of its labor.