Clearstream has joined the European Central Bank’s (ECB) trial to explore distributed ledger technology (DLT) for wholesale central bank money (CeBM) settlement. The Deutsche Börse subsidiary reveals in a press release that it is the only central securities depository (CSD) to participate in the first wave of the trial and shares its aim to “assess the feasibility of using DLT for wholesale transaction processing, using tokenised securities”.
The ECB’s exploratory work was launched in light of the possible development of a digital euro. A part of Clearstream’s test will be on euro-denominated issuances and delivery-versus-payment (DvP) transactions across different use cases and payment models. To support the testing, the firm has collaborated with Google Cloud to enhance its digital post-trade platform D7 with DLT capabilities for tokenised securities.
The trial will use three solutions that enable interoperability between market DLT platforms and central bank infrastructures – Trigger Solution by Deutsche Bundesbank, TIPS Hash-Link by Banca d’Italia, and Full DLT Interoperability by Banque de France. Clearstream will connect to all three.
Jens Hachmeister, head of issuer services and new digital markets at Clearstream mentions “fostering connections with the main digital payment solutions across the Eurosystem” as an important part of the endeavour.
All three of Clearstream’s CSDs – German, Luxembourg, and international – are involved. The trial is set to run from May to November this year and will be conducted using real central bank money.