French multinational financial services company BNP Paribas is building a new blockchain platform to allow private companies to issue mini-bonds — short-term debt instruments issued by private companies to investors.
BNP Paribas Announces Newest Initiative
The bank’s custody arm, BNP Paribas Securities Services, is leading the new initiative at its new digital lab. Its blockchain will maintain a record of all mini-bonds issued through the platform, plus all information regarding ownership changes.
Marc Younes, head of business management at BNP Paribas Securities Services’ Innovation & Digital Lab, said:
“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.”
Additionally, the company said blockchain technology will provide security as well as speed and efficiency for financial transactions.
Partnership with 3 Companies
For the mini-bonds project, BNP Paribas has partnered with three French renewable energy crowdfunding providers: Lendosphere, Enerfip and Lumo.
Lendosphere launched in December 2014. It is a crowdfunding platform dedicated to energy and ecological transition including renewable energy, circular economy, green building, clean mobility, eco-technologies, and sustainable agriculture.
Enerfip launched in fall 2014. It also specializes in renewable energy projects including solar, wind, hydro, biomass and marine energy.
Created in 2012, Lumo is another crowdfunding platform dedicated to supporting renewable energy. In June, the company partnered with ElectriCChain to deliver SolarCoin to investors.
In April, BNP Paribas also partnered with investment platform SmartAngels to develop a pilot blockchain-based crowdfunding platform, which would allow companies to issue shares. The bank aims to launch the platform in the second half of 2016, subject to regulatory approvals.
French Mini-Bond Law
This initiative follows the French government’s announcement it would allow private companies to issue mini-bonds on crowdfunding platforms. The rule, which has not received final approval, specifically states that companies can issue mini-bonds on distributed ledgers. In order to launch as soon as the law is approved, the bank aims to have its new platform ready by the end of 2016.
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Images courtesy of BNP Paribas, SmartAngels, Lendosphere, enerfip, Shutterstock