Clearstream, DekaBank, and DZ Bank have jointly issued two tokenized bonds valued at €5 million each, using distributed ledger technology (DLT). These issuances are part of the European Central Bank (ECB) trials aimed at exploring the potential of DLT for settling wholesale transactions in central bank money.
The entire process, from the transaction of the security to the transfer of funds using digital central bank money, was executed on Deutsche Börse’s D7 DLT platform. This includes the issuance, distribution, settlement, and full lifecycle management of the bonds. DekaBank acted as the issuer and DZ Bank as the investor, with roles reversed for the second issuance. Clearstream served as the DLT Market Operator, providing the necessary technical infrastructure through its digital securities platform D7, developed in partnership with Google Cloud. The D7 platform, when connected with the Bundesbank Trigger Solution, ensures that bond settlements are reflected in the European TARGET2 payment system.
These transactions are the first institutional-grade issuances in Germany using DLT and wholesale digital central bank money. Issuing securities on DLT aims to increase transparency and automation, reducing the need for manual intervention. Using central bank money is expected to enhance safety, liquidity, and monetary policy alignment for issuers and investors.
Silvio Lenk, Head of Treasury at DekaBank, commented, “The use case demonstrates the simplicity of issuing a security with DLT technology and benefiting from the Trigger Solution. The delivery versus payment of the Trigger Solution shows how the issuing and settlement processes of private blockchains and wholesale CBDC will interact in future. As issuer, banks can benefit from the speed, scalability, and security of the new technology.”
Dr. Holger Meffert, Head of Securities Services & Digital Custody at DZ Bank, said, “To explore the potential of digital assets, you have to consider the whole lifecycle – from issuance via dvp settlement to maturity, including the use of central bank money. Participating in the ECB trials with partners like Deutsche Börse Group and DekaBank, we gain valuable insights on our path to higher efficiency.”
Jens Hachmeister, Head of Issuer Services & New Digital Markets at Clearstream, added, “With the next-generation digital post-trade platform D7, Clearstream aims to digitize the entire post-trade value chain. With our new D7 DLT, launched for the ECB trials, we provide processing of digital assets and high-quality cash on-chain, which is a step in developing a digital European securities landscape. This transaction is a milestone for the creation of stable digital capital markets in Germany and Europe, demonstrating the role of digital solutions in enhancing safety, liquidity, and efficiency.”
The ECB trials are conducted in a productive environment using real central bank money and are scheduled to run from May to November 2024.
About Clearstream
Clearstream is the post-trade business for global markets, operating the German and Luxembourg central securities depositories and an international central securities depository for the Eurobonds market. With €18 trillion in assets under custody, Clearstream is one of the settlement and custody firms for domestic and international securities. Clearstream is part of Deutsche Börse Group.
About DekaBank
DekaBank is the securities services provider of the German Savings Banks Finance Group (Sparkassen-Finanzgruppe). With over €381 billion in total customer assets and more than 5.5 million securities accounts, DekaBank is one of Germany’s securities services providers and real estate asset managers.
About DZ Bank
DZ BANK is the central institution in the cooperative financial network and serves around 700 cooperative banks. It operates as a corporate bank and is the holding company for specialized service providers in the DZ BANK Group. The group supports local cooperative banks and their branches in retail banking, corporate banking, capital markets, and transaction banking, with an international presence in key financial centers.
Image by Paul Pastourmatzis from Unsplash
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