– First institutional-grade issuances in Germany using DLT and settling in central bank money
– Bonds entirely processed on DLT
– Conducted during ECB trials in productive environment
Clearstream, DekaBank and DZ Bank have jointly issued two tokenised €5-million bonds using distributed-ledger technology (DLT). The issuances took place in the context of the ECB trials aimed at exploring the potential of DLT for settling wholesale transactions in central bank money.
The processes entirely run on Deutsche Börse’s D7 DLT. This includes both the transaction of the security itself and the transfer of funds using digital central bank money – from issuance via distribution and settlement to full lifecycle management. DekaBank acted as issuer, DZ Bank as investor – with swapped roles in the second case. Clearstream acted as DLT Market Operator, providing the technical infrastructure with its digital securities platform D7 developed in strategic partnership with Google Cloud. By connecting D7 with the Bundesbank Trigger Solution, the bond settlement is seamlessly reflected in the European TARGET2 payment system.
The transactions mark the first institutional-grade issuances in Germany on DLT using wholesale digital central bank money. Issuing securities on DLT increases transparency and automation, which reduces the need for manual intervention. Additionally, using central bank money provides enhanced safety, liquidity and monetary policy alignment for issuers and investors alike.
“The use case impresses with the simplicity of issuing a security with DLT technology and at the same time benefiting from the advantages 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 future. As issuer, banks benefit from the speed, scalability and security of the new technology,” said Silvio Lenk, Head of Treasury at DekaBank.
“To explore the potential of digital assets, you have to take care of the whole lifecycle – from issuance via dvp settlement to maturity including the utilisation of central bank money. Participating in the ECB trials with strong partners like Deutsche Börse Group and DekaBank, we are delighted to get valuable insights on our way to higher efficiency,” Dr. Holger Meffert, Head of Securities Services & Digital Custody at DZ Bank, pointed out.
Jens Hachmeister, Head of Issuer Services & New Digital Markets at Clearstream, said: “With the next-generation digital post-trade platform D7 Clearstream aims to digitise the entire post-trade value chain. With our new D7 DLT, launched for the ECB trials, we provide seamless processing of digital assets and high-quality cash on-chain, which is an important step in developing a digital European securities landscape. 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 conducted in a productive environment, using real central bank money. The timeframe is set for May to November 2024.
Source: Clearstream
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