In recent years, market participants have demonstrated a wider acceptance of Distributed Ledger Technology (DLT) and its potential for significantly transforming global capital markets as it continues to evolve. The key driver for its success in both pre-trade and post-trade spaces will be technology that can provide open shared data in a controlled safe environment.

Introducing Euroclear’s Digital Financial Market Infrastructure (D-FMI) platform, our latest technology addition, based on DLT, aiming to improve market efficiency and connection through innovation.

The first service offering available on D-FMI is Digital Securities Issuance (D-SI), offering a real DLT environment for the issuer ecosystem while enabling secondary market investors to trade Digital Native Notes (DNN) on the traditional settlement platform – all in compliance with CSDR. In addition, issuance via D-SI is managed on a T+0 basis, a key benefit of the DLT technology.

We are pleased to share with you that the inaugural DNN was issued by the World Bank, raising EUR 100 million to support the financing of the World Bank’s sustainable development activities and was listed on the Luxembourg Stock Exchange.

“The integration of DLT in asset issuance is a critical step forward in the evolution of our ecosystem’s digital capabilities, as we continue to deliver on our goal of becoming a fully digital and data enabled Financial Market Infrastructure.”

Lieve Mostrey

Chief Executive Officer, Euroclear group

Source: Euroclear

R3’s enterprise distributed ledger technology (DLT) platform Corda underpinned the first live issuance of a digital bond with Euroclear’s International Central Securities Depository (ICSD)

The transaction represents a major development in Euroclear’s ongoing Distributed Financial Market Infrastructure (DFMI) initiative, harnessing the power of R3’s Corda platform to improve the transparency, speed and resilience of the bond issuance process.

The SSA (supranational, sovereign and agency) bond was issued by the World Bank, with Citi – an R3 investor – acting as issuer agent and TD Securities acting as dealer. The issuance took place under UK law and was successfully completed yesterday, Monday 23^rd of October at 1pm BST.

The issuance of the digital bond is another example of R3’s Corda being leveraged by regulated institutions around the world to digitise the capital markets and drive innovation forward. The use of Corda’s unique distributed architecture demonstrated the capabilities of the platform to support the issuance and primary distribution part of the lifecycle of a bond under the existing legal framework applicable to an ICSD.

R3 is enabling an open, trusted and enduring digital economy where value is securely exchanged. In addition to Euroclear, Corda is being used by hundreds of institutions to power digital finance solutions across capital markets.

“Through working with our extensive global ecosystem, we have achieved a major milestone in both our DFMI initiative and the evolution of securities trading as a whole.” said Antonio Queiroz, Chief Digital Officer at Euroclear. “As a financial market infrastructure with a track record of providing high quality settlement services to the world’s leading financial institutions, we are excited to continue building on our partnerships  to drive digital transformation in the industry and to improve transparency and efficiency across capital markets as a whole.”

“This issuance is not a sandbox or proof of concept project – it is a live market issuance and it demonstrates the role DLT can play in transforming capital markets,” said David E. Rutter, CEO and Founder of R3. “FMI’s such as Euroclear play a critical role in the financial ecosystem. We’re working with them and central banks in areas such as securities settlement to improve how we communicate and exchange value, ultimately to deliver a better, more efficient, open, trusted and enduring digital economy. This is about bringing participants and ecosystems together to modernize mission-critical processes in the capital markets industry. Corda is emerging as the technology of choice because it was designed for regulated markets from the ground-up, ensuring resiliency, governance, scalability and security.”

Source: R3

Citi acts as first Issuing and Paying Agent for World Bank on Euroclear’s new D-FMI DLT platform

Citi’s Issuer Services, a part of Securities Services, acted as the Issuing and Paying Agent for the first Digitally Native Note (DNN) issuance under English Law via Euroclear’s Digital Financial Market Infrastructure (D-FMI) distributed ledger technology (DLT) platform. The EUR 100 million 3-year DNN was issued by the World Bank – International Bank for Reconstruction and Development (IBRD) – (rated Aaa/AAA) and listed on the Luxembourg Stock Exchange.

The creation and settlement of DNNs on a T0 basis is an important first step in the evolution of bonds and lays the foundations for a fully digital end to end transaction lifecycle.

This partnership between existing key industry stakeholders provides a scalable model that delivers the benefits of digitization whilst preserving existing bond accessibility and liquidity, illustrating how blockchain technology can be integrated with existing capital markets architecture. Today is the culmination of a multi-year program with stakeholders including Citi, Euroclear and IBRD to deliver a sustainable digital infrastructure for the issuance of DNNs. It is envisaged that the D-FMI will improve efficiency and growth opportunities for debt capital market participants as the infrastructure continues to develop.

“We are delighted to work with our partners at Euroclear and IBRD on this inaugural digital issuance. It demonstrates the continued value of the international issuance model and its potential to transform the way in which the debt capital markets operate. As one of the world’s leading providers of services to debt issuers we continue to work with our partners to provide innovative solutions that deliver benefits including improved transparency, efficiency, liquidity, and client experience” said Andrew Mulley, EMEA Head of Citi’s Issuer Services.

“This initiative perfectly aligns to our mission of connecting our clients into new digital networks that enable them to create, or invest in, digital assets to unlock new efficiency, value and operating models” said Ryan Marsh, Global Head of Blockchain, Digital Assets & Innovation for Citi Securities Services.  “This is the latest in a series of digital bond initiatives that we expect to participate in.”

Lieve Mostrey, Euroclear Group CEO said: “Our collaborations with Citi, TD Securities and the IBRD have been instrumental in the launch of this major innovation in asset issuance. The integration of our distributed ledger technology capabilities marks a significant milestone in the digital transformation of our global financial markets. Today’s announcement represents a momentous stride towards realising the boundless potential of digital assets, underpinned by our shared commitment to pioneering innovation and delivering transformative solutions for investors and issuers on a global scale.”

“Since the World Bank’s first blockchain bond “bond-i”, debt capital markets have been moving towards digitization, step-by-step. We are pleased to announce that today we contributed to this ongoing development through issuing the inaugural digital native note on Euroclear’s D-FMI platform, working together with Citibank and others,” said Jorge Familiar, Vice President and Treasurer, World Bank.

Citi continues to develop digital asset solutions, in line with its goals and risk appetite, using a unified set of shared technology capabilities and a common strategic approach. These innovative solutions enhance Citi’s products and services including digital money, trade, securities, custody, asset servicing and collateral mobility.

Source: Citi