Euroclear is exploring the potential of using blockchain technology to create a next generation settlement service for the London gold market.
The clearing house says it is working with blockchain infrastructure firm itBit and market participants to evaluate the use of distributed ledgers to remove the risks and reduce the capital charges related to the settlement of unallocated gold.
ItBits' Bankchain product is a private network of trusted participants that clears, tracks and settles trades in close to real-time, opening the prospects of providing true delivery-versus-payment in the bullion market.
Angus Scott, director, product strategy and innovation at Euroclear comments: “As an open and resilient infrastructure, our strategy has been to work with relevant industry stakeholders. 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.”