The European Central Bank has put together a host of participants for exploratory work on the use of distributed ledger technology to settle wholesale transactions in central bank money. The first wave of trials will involve 10 market participants, six market DLT operators and five central banks, carrying out tests involving actual settlement in central bank money and experiments with mock settlement in a test environment. Clearstream is the only central securities depository to participate in wave 1 of the trials.
Clearstream, Deutsche Börse Group’s post-trade business, „joins the European Central Bank (ECB) trials and experiments, aimed at exploring the potential of distributed-ledger technology (DLT) for wholesale central bank money settlement, in the light of the development of a digital Euro” – according to the press release.
Together with leading institutions, infrastructures and fintech businesses, Clearstream contributes to this transformative endeavour as DLT market operator with its leading digital post-trade platform D7 and all three central securities depositories (CSDs): its German CSD, LuxCSD in Luxembourg and the international CSD. Clearstream is the only CSD to participate in the first wave of the ECB trials.
„By participating in the ECB trials, Clearstream aims to assess the feasibility of using DLT for wholesale transaction processing, using tokenised securities. This includes conducting euro-denominated issuances and delivery-versus-payment (DvP) transactions across different use-cases and payment models.” – the company explained.
To optimally support the goal of the exploration, Clearstream has enhanced its digital post-trade platform D7 with respective DLT capabilities. This was done in collaboration with Google Cloud, leveraging the strategic partnership of Deutsche Börse Group and Google Cloud. Clearstream’s D7 has a proven track record with over 25,000 digital securities issuances, more than any other digital post-trade solution worldwide.
Jens Hachmeister – Head of Issuer Services & New Digital Markets at Clearstream, said: “Clearstream’s participation in the ECB trials is a significant milestone in our digitisation journey: we are expanding our D7 digital securities infrastructure with DLT components and fostering connections with the main digital payment solutions across the Eurosystem. We are thrilled to further collectively shape the future of an inter-connected digital European settlement landscape together with the ECB and our broad participant base. Of course, Clearstream will leverage the trial insights to further enhance D7 for the industry.”
The ECB trials will be conducted in a productive environment, using real central bank money. The timeframe is set for May to November 2024.
Clearstream will connect to all three central bank digital offerings: Bundesbank’s Trigger Solution, Banca d’Italia’s TIPS Hash-link and Banque de France’s Full DLT Interoperability.
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Clearstream operates the German and Luxembourg central securities depositories and an international central securities depository for the Eurobonds market. With 18 trillion Euros in assets under custody, it is one of the world’s largest settlement and custody firms for domestic and international securities. It also delivers premier fund execution, distribution, data and reporting services, covering over 55 fund markets worldwide. Clearstream is part of Deutsche Börse Group, an international exchange organisation and provider of innovative market infrastructures.
Banking 4.0 – „how was the experience for you”
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