With a digital euro in mind, the effort will explore DLT’s potential for wholesale central bank money settlement.
Clearstream, the post-trade business unit of Deutsche Börse Group, has joined the distributed-ledger technology (DLT) trials and experiments of the European Central Bank (ECB), which is exploring DLT’s potential for wholesale central bank money settlement, given the emergence of a digital Euro.
“The ECB trials will be conducted in a productive environment, using real central bank money. The timeframe is set for May to November 2024,” according to the announcement.
Clearstream joins institutions, infrastructures, and fintech businesses engaged in “this transformative endeavor as DLT market operator” via its digital post-trade platform D7 and “all three central securities depositories (CSDs),” according to the initial announcement.
Clearstream, which operates the German and Luxembourg CSDs and an international CSD for the Eurobonds market “is the only CSD to participate in the first wave of the ECB trials,” officials say.
Through participation in the ECB trials, Clearstream “aims to assess the feasibility of using DLT for wholesale transaction processing, using tokenized securities. This includes conducting euro-denominated issuances and delivery-versus-payment (DvP) transactions across different use-cases and payment models,” officials say.
Clearstream has already “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,” officials add. Clearstream’s D7 has yielded 25,000 digital securities issuances, “more than any other digital post-trade solution worldwide.”
Clearstream’s participation “is a significant milestone in our digitization journey: we are expanding our D7 digital securities infrastructure with DLT components and fostering connections with the main digital payment solutions across the Eurosystem,” says Jens Hachmeister, head of issuer services and new digital markets at Clearstream, in a prepared statement.
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, officials add.
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