ZURICH/NEW YORK (Reuters) – Financial companies led by Swiss bank UBS (UBSG.S) are testing a blockchain platform to help them comply with new European Union trade data standards due to come into force next year.

FILE PHOTO: Christmas decorations are seen at the building of Swiss bank UBS at the Paradeplatz square in Zurich, Switzerland, November 27, 2017. REUTERS/Arnd Wiegmann

Blockchain, the technology underpinning cryptocurrencies such as bitcoin, is a shared and immutable database maintained by a network of computers on the internet.

The more stringent requirements are part of the Markets in Financial Instruments Directive II, an overhaul of EU rules aimed at improving financial market transparency..

“The project is getting market participants to collaborate using blockchain to improve regulatory reporting,” Peter Stephens, head of blockchain at UBS, told Reuters.

The group, which includes Barclays BARC.N, Credit Suisse (CSGN.S), KBC (KBC.BR), Swiss stock exchange SIX and Reuters parent Thomson Reuters (TRI.TO), is testing an Ethereum blockchain to help ensure data accuracy and consensus.

Ethereum, a type of blockchain that can be used to develop decentralized applications, was invented by 23-year-old programer Vitalik Buterin. Many large companies and industry consortia have teamed up to develop standards and technology to make it easier for enterprises to use the Ethereum code, hoping it can help them streamline some of their processes.

“The point is to allow us to come to a consensus for this noncompetitive reference data which is essential for trade reporting purposes,” Stephens said.

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