The collaboration between post-trade services provider Euroclear and fintech startup Paxos to build blockchain settlement service for London bullion market has been terminated, Reuters reported.

In an interview, Christine Vanormelingen, global head of communications and investor relations at Euroclear, said that Euroclear will no longer work with Paxos on the project. However, Vanormelingen did not reveal the reason behind this decision.

"Not all of the startup collaborations come to a conclusive end, that is part of how you develop an innovation strategy," Vanormelingen said. "We remain committed to offering a solution to the London bullion market."

In June 2016, Euroclear and itBit, which later rebranded to Paxos, announced their collaboration to explore opportunities in creating a next generation settlement service for the London gold market. The discontinuation of the partnership is rather unexpected, particularly as two pilot programs have been already successfully completed.

The first pilot program, held last December, saw over 600 OTC test bullion trades settled on the Euroclear Bankchain platform, the blockchain settlement service, over the course of two-weeks. The second pilot was successfully completed in April 2017 and included 16 market participants including Citi, Société Générale, MKS PAMP Group, INTL FCStone Ltd, Barrick Gold Corporation, NEX EBS BrokerTec and ED&F Man and saw over 100,000 settlements.

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