Colombia became the first Latin American nation with the issuance of real stock bonds using blockchain technology throughout the issuance, registration, and negotiation.
Colombia became a pioneer in Latin America due to the pilot test of issuance of stock bonds with Blockchain technology. Viewed in this way, the Superfinancial of the New Granada country leaps its peers in Latin America regarding this type of technology at the stock market level.
The Innovation Committee of the Financial Superintendence of Colombia (SFC,) through a statement, revealed that the first bond issuance received its approval in the second market using Blockchain technology and smart contracts. These smart contracts will be there to receive vigilance in the controlled space of sand from the sandbox in all phases of the process.
This test will be the first to be implemented in Latin America with this kind of technology. The statement highlights that the issuance of this bond does not involve all the traditional infrastructure that uses a centralized deposit of securities.
This issuance will have all the phases of a traditional bond issuance: the instrument in the National Securities Registry and Issuers (RNVE), assignment, placement, registration of payments, final negotiation, and fulfillment of the operation.
This Test will Cover Various Issues
This pilot test intends to demonstrate the effectiveness of blockchain technology in times of interoperability, immutability, and efficiency. The goal of the test is to set a clear view of whether the times are optimal for the entire process or if it is time to create the bond and negotiate it. The times of shared information, simplification of the clearing, and settlement stage will enter in testing procedures in this essay.
The Davivienda banks, the IDB Group and the Banco de la República will take part in the transaction. The first of them will act as the issuer of the test bond, the IDB Invest will lead as the investor in the test, and the Banco de la República will watch and make sure that the process gets completed according to expectations.
The Goal is to Reduce Administrative Assignations
Part of the search for this innovation also aims at reducing administrative issuances, and lower costs in parallel with the assignment of bonds. So the integration of technology should allow more processes to be more unified, allowing the evolution of the procedures safely.
The success of this test would carry out some problems regarding the update of the stock exchange regulations that rule over the whole process, since they aim directly at an administrative process written and traditionally physical (paperwork) than through the use of Blockchain technology.
For this issue, the regulatory entity in charge has to ensure the creation of the bonds and create an exception to the rule for the use of electronic means in the issuance, registration, and negotiation of the bonds under test.
By: Jenson Nuñez
