The French government opened the way on Friday for trading unlisted securities using blockchain digital ledgers with the adoption of new rules aimed at improving Paris’ image as a center for financial innovation.
The new rules mean that banks and fintech companies can set up blockchain platforms where unlisted securities can trade instantly, cutting out middlemen like brokers and custodian banks.
Securities listed on financial exchanges will still be required to pass through custodians and clearing houses.
“The use of this new technology will allow fintech firms and other financial actors to develop new ways of trading securities that are faster, cheaper, more transparent and safer,” Finance Minister Bruno Le Maire said in a statement.
Le Maire added that the new rules would be “another asset for Paris’ attractiveness as a financial center” as the sector seeks to put itself on the fintech map, where London currently looms large.
Eager to attract business from London after Brexit, the French government has already introduced measures to make Paris a more attractive financial center ranging from payroll tax cuts to a labor reform and promises to set up more international schools.
Blockchain, which first emerged as the system underpinning cryptocurrency bitcoin, is a shared ledger of transactions that is maintained by a network of computers on the internet rather than a central authority.
Financial institutions have been ramping up their investments in the nascent technology in the hope that it can help reduce the complexity and cost of some of their burdensome back office processes.