Clearstream, DekaBank and DZ Bank have issued two tokenised €5 million bonds using distributed ledger technology (DLT).
The bonds were issued during the ECB’s trials around the potential of DLT for settling wholesale transactions in central bank money, which is taking place until November.
In the first instance, DekaBank acted as issuer and DZ Bank as investor, with the roles reversed in the second process. Clearstream was DLT market operator, using Deutsche Börse’s D7 DLT. platform to host the issuances.
D7 DLT hosted the issuances, including the transaction of the security and the transfer of funds using central bank money. Through connection with the Bundesbank Trigger Solution, allowed the bond settlement to be reflected in the European TARGET2 payment system.
These are the first institutional-grade issuances using wholesale digital central bank money to take place in Germany. The process increases transparency and automation, Deutsche Börse stated, reducing the need for manual intervention. Using central bank money improves safely, liquidity and monetary policy alignment for both issuers and investors, it added.
Silvio Lenk, head of treasury at DekaBank, said: “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.”
Jens Hachmeister, head of issuer services and new digital markets at Clearstream, commented: “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.”
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