The Eurosystem has successfully concluded a series of tests employing distributed ledger technology (DLT) for wholesale settlement in central bank money. Between May and November 2024, the Eurosystem processed over 200 transactions and a total value of €1.59 billion.
In total, 64 participants comprising central banks, financial market participants and DLT operators completed over 40 trials and experiments. Trials included actual settlement in central bank money, while experiments were tests with mock settlement. The full list of use cases tested is available on the ECB’s website.
The Eurosystem will draw lessons from the exploratory work and further analyse the opportunities and challenges of DLT for financial markets. This will include considering how to facilitate the provision of central bank money settlement for wholesale transactions of assets on DLT platforms. In January 2025, participants involved in the exploratory work will be invited to discuss lessons learned from the trials and experiments. The outcome of the analysis will inform the Eurosystem’s decision on its next steps.
Source: European Central Bank
HQLAX, Clearstream and Eurex Repo facilitate settlement of intraday DvP Repo for Goldman Sachs in ECB trials
HQLAx, Clearstream and Eurex Repo have collaborated to facilitate intraday delivery-versus-payment (DvP) repo transactions using distributed ledger technology (DLT) in the ECB trials. The ECB trials are part of the Eurosystem exploratory work on new technologies for wholesale central bank money settlement, with trials denoting production transactions using real securities and cash.
The transactions took place between Goldman Sachs and Clearstream, acting as principal, between 26 and 28 of November with Goldman Sachs borrowing cash from Clearstream whilst delivering collateral via the HQLAx platform.
The participants submitted the trades on the Eurex Repo F7 trading system. Clearstream acted as market DLT operator with its digital securities platform D7 and coordinated the settlement of the transaction between HQLAx, which facilitated the collateral settlement, and the Bundesbank’s Trigger solution for the cash settlement in real-time gross settlement (RTGS). The trades were submitted same-day, and securities and cash were settled and returned intraday.
The transactions mark the first DvP repo trades to settle in production using HQLAx’s DLT platform. Participation in the ECB trials demonstrates HQLAx’s ability to interoperate with other DLT platforms to settle DvP across two independent ledgers.
Amar Amlani, Head of EMEA Digital Assets, Goldman Sachs: “Intraday markets offer a valuable tool for institutions to optimize their liquidity and collateral more efficiently while also acting as a method to manage risks and create new revenue streams. DLT solutions such as HQLAx combined with digital money solutions provide market participants with greater precision and simultaneous settlement which are critical for intraday markets to operate more effectively at scale and free up key resources.”
Guido Stroemer, CEO and Co-Founder of HQLAx: “We are pleased to have successfully settled our first intraday DvP repo trade in the ECB trials. Through participating in the trials, HQLAx has demonstrated its ability to interoperate with different forms of cash, including legacy cash in RTGS for DvP settlement. This is a significant milestone in creating an intraday DvP repo market in Europe, and we are excited to be part of its future development.”
Jens Hachmeister, Head of Issuer Services & New Digital Markets at Clearstream: “The ECB trials have yielded great success. Clearstream has been part of ten use cases and the experience gathered has been extremely valuable. Managing intraday repo transactions on the HQLAx DLT platform has demonstrated clear advantages for the future of digital repo. Our D7 DLT, launched for the ECB trials, enables seamless processing of digital assets and high-quality cash on-chain, marking a significant step towards building a digital financial ecosystem in Europe.”
Frank Gast, Member of the Executive Board Eurex Repo GmbH & Global Head of Repo Sales at Eurex: “This has been an incredible opportunity for Eurex Repo together with our Deutsche Börse Group colleagues, our clients, and service partners to make a difference in the wholesale central bank money settlement trials. We’re fully committed to backing the ECB’s pioneering work in adopting DLT-based solutions, which are crucial for the future evolution of the repo market.”
Source: Clearstream
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