Time: 2024-07-03
In a recent move to test the use of distributed-ledger technology (DLT) for settling wholesale transactions of a Central bank digital currency, Clearstream, a private market platform owned by Deutsche Börse AG; DekaBank, a German securities services provider; and Germany-based DZ Bank successfully issued two tokenised 5 million bonds using DLT. This process leveraged Deutsche Börse's D7 DLT, which was launched for European Central Bank CBDC trials. DekaBank acted as the issuer, DZ Bank as an investor, and Clearstream acted as the DLT Market Operator, providing the technical infrastructure with its digital securities platform D7 developed in a strategic partnership with Google Cloud.
To explore the potential of digital assets, the entire lifecycle must be taken care of, from issuance via DVP settlement to maturity, including the utilization of central bank money. Dr. Holger Meffert, head of securities services and digital custody at DZ Bank, emphasized the importance of participating in the ECB trials with strong partners like Deutsche Börse Group and DekaBank. The aim is to gain valuable insights on the way to higher efficiency.
Jens Hachmeister, head of issuer services and new digital markets at Clearstream, highlighted the significance of the test in developing a digital European securities landscape. The next-generation digital post-trade platform D7 aims to digitize the entire post-trade value chain, providing seamless processing of digital assets and high-quality cash on-chain. This transaction represents a significant milestone for the creation of stable digital capital markets in Germany and Europe, demonstrating the power of digital solutions in enhancing safety, liquidity, and efficiency.
The ECB trials are being conducted using real central bank money, with a timeframe set for May to November 2024. Silvio Lenk, head of treasury at DekaBank, commented on the simplicity of issuing a security with DLT technology and the benefits of the Trigger Solution. The delivery versus payment of the Trigger Solution proves how the issuing and settlement processes of private blockchains and wholesale CBDC will interact in the future. Banks benefit from the speed, scalability, and security of this new technology.
In conclusion, the successful issuance of tokenized bonds using DLT for settling wholesale transactions of a central bank digital currency marks a significant step in the exploration of distributed ledger technology in the financial sector. The collaboration between Clearstream, DekaBank, and DZ Bank, supported by Deutsche Börse's D7 DLT, showcases the potential for increased efficiency, transparency, and safety in the issuance of digital assets. The ongoing ECB trials further demonstrate the commitment to testing and developing innovative solutions for the future of finance.
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