The sandbox admits a blockchain-based SME financing platform by BME

14 May, 2021

  • The project envisages the creation of a platform that facilitates the financing of small and medium-sized companies through the issuance of digital tokens.
  • This platform would be complemented with other SME financing alternatives provided by BME

The Ministry of Economic Affairs and Digital Transformation has admitted to its safe testing environment for the transformation of the financial system (sandbox) the project submitted by BME, in collaboration with firms in the SME financing ecosystem.

The project consists of the creation of a platform or "marketplace" for alternative financing that offers security to investors and helps small and medium-sized companies to raise financing through the issuing of participatory loans and convertible notes represented as digital assets in a blockchain network. The platform is primarily aimed at facilitating the financing of limited liability companies, which, in addition to their size, due to their status as LLC, face limited financing alternatives other than bank financing.

In addition to the participation of issuers and investors, investment services firms (ESIs) play an important role in the platform, both in the onboarding and validation processes and in the marketing and management of issues.

In order to optimise processes in this type of financing and obtain the benefits of blockchain technology, the platform integrates an electronic money solution (EDE) so that users have an e-wallet where all their assets are stored, both electronic money and financial instruments represented as digital assets.

BME intends this platform also to serve as a link with BME Growth, BME’s SME growth market, by creating a fast track to this market, putting companies in contact with the appropriate professionals to, for example, facilitate their conversion into public limited companies at the time of conversion of loans into capital or to initiate the application process for the listing of these shares on BME Growth.

Companies can also rely on BME's Pre-Market Environment, an initiative launched three years ago by BME, which consists of a training and networking programme for growth SMEs to learn how capital markets work and gain access to private and institutional investors.

The advantages of this project submitted to the sandbox include facilitating regulatory compliance (by improving or standardising processes), improving regulation and the exercise of financial supervision, increasing the efficiency of institutions, improving Spain’s competence and offering such advantages to users of financial services, as transparency, real-time information and a one stop shop for integral management.

The project's entry into the sandbox represents the second phase in the project's roadmap, following a successful pilot conducted in the summer of 2020 with a number of investment services firms, issuers and investors.

The project's blockchain network is based on Ethereum technology.

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