BNP Paribas working with Nxt technology

A recent article in Revue Banque mentioned several internal projects run by BNP Paribas based on the Nxt blockchain platform.

For our English speaking website visitors, we present a translation of relevant quotes from that article:

In April 2016, you announced a partnership with the crowdfunding platform Smartangels to develop a blockchain dedicated to unlisted investments. How has the project progressed?

That project was focused on unlisted securities that were bought by investors via the Smartangels crowdequity platform. The first goal was to use blockchain technology to maintain a ledger of the subscribers and to handle certain corporate actions such as the convening of general meetings. This is the role of a custodian and we can confirm that the platform worked from a technical point of view. Today, we have entered an analytical phase: we know that the platform must be complemented by adding new functionalities and we are currently studying which features are truly necessary to allow the management of unlisted securities. Among other things, certain legal concepts will need to evolve.

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Which technical decisions did you make regarding that blockchain?

We used the Nxt protocol, which we installed on a private network. The central nodes were hosted by BNP Paribas and other participants to the project also had one node at their disposal. The idea is that over time and as we keep adding partners, the network will grow and become richer and more stable.

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We do not use a Proof-of-Work protocol like the Bitcoin blockchain, but instead a Proof-of-Stake protocol, which requires less computing power and is therefore faster and more efficient in terms of electric consumption.

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Do you have other blockchain projects apart from custodian activities?

We implemented a blockchain that allowed us to be independent from the corresponding banks and the Swift network in the case of cross border cash transactions between clients of BNP Paribas. That was the Cash Without Borders project, which we executed with several corporate clients, and which was based on the Nxt protocol. These transactions were made using official currencies, without the intervention of a cryptocurrency. We use the blockchain to register the transactions, to memorize them, to date them, and to share them within limited timeframes: while it takes 2 days – or even more – to complete a transfer via corresponding banks, we can complete it within 2 hours using the Cash Without Borders system (the step using the blockchain only takes a few seconds, and then we use other systems and processes). The clearing, settlement and reporting happen in real time and the main sources of error are eliminated.