Euroclear, a Belgium-based financial services company, and Paxos, a fintech company delivering pioneering blockchain solutions, have announced the successful completion of the first pilot for Euroclear Bankchain.

Euroclear Bankchain is a new blockchain settlement service for London bullion due to go live in 2017. According to the official release, over 600 OTC test bullion trades were settled on the Euroclear Bankchain platform during the two-week pilot.

The pilot saw the involvement of a number of leading market participants in the London Bullion market including Scotiabank, Société Générale, Citi, MKS PAMP Group and INTL FCStone. All are part of the Euroclear Bankchain Market Advisory Group that now includes 17 participants working with Euroclear and Paxos in the roll-out of the new service.

"The pilot has been very useful in helping us further refine the Bankchain platform," said Seth Phillips, Bankchain Product Director at Paxos. "The level of engagement from market participants was extensive and they were excited by settlements enabled on a real blockchain for the first time and to see how quickly their feedback could be incorporated into the platform."

Euroclear Bankchain combines Euroclear's strengths as an international securities depository and settlement provider and Paxos' flagship blockchain technical platform, Bankchain, to bring instant settlement and simultaneous delivery versus payment to the London bullion market. The settlement of unallocated gold is a very capital-intensive process. Euroclear Bankchain will significantly minimise risk, leading to a reduced capital charge and reduced balance sheet constraints, the release said.

“This is a real first step in bringing a new settlement capability to the London bullion market that will help lower risk and simplify the post-trade process”, Angus Scott, Director, Product Strategy and Innovation at Euroclear added.

itBit, which rebranded as Paxos, partnered with Euroclear in June 2016 in order to explore blockchain solution for London gold market settlement. In the forthcoming months, Paxos and Euroclear will continue to work closely with the London bullion market and integrate feedback from the pilot into the Euroclear Bankchain service.

Another market simulation will run early next year in preparation for a production launch later in 2017.