Euroclear, a Belgium-based financial services company and itBit, a fintech company that develops blockchain technology for asset trading, announced their collaboration on Tuesday in order to explore blockchain solution for London gold market settlement.

According to the press release, the companies are working together along with relevant market participants to develop a service which will significantly minimize the risk leading to a reduced capital charge, deliver true delivery versus payment and reduce balance sheet constraints.

“Euroclear is pleased to be working with itBit on this initiative. 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,” Angus Scott, Director of product strategy and innovation at Euroclear said.

The partnership of Euroclear with itBit is based on the itBit’s proprietary blockchain infrastructure technology and flagship product called ‘Bankchain’. It is a private ledger of trusted participants which clears, tracks and settles trades in close to real-time.

“We are excited to be partnering with Euroclear to develop a trusted digital infrastructure for gold. Precious metals are the first use case for Bankchain, and London bullion is a market in which a distributed ledger can have an immediate benefit," Chad Cascarilla, CEO of itBit said.

Founded in 1968, Euroclear specializes in the settlement of securities transactions as well as the safekeeping and asset servicing of these securities. The company settles domestic and international securities transactions, covering bonds, equities, derivatives and investment funds.

Launched in 2012, itBit is a New York-based fintech company that develops blockchain technology for asset trading and operates a bitcoin exchange.