Blockchain based pan-European funds marketplace IZNES has successfully completed a trial exploring DLT settlement in wholesale central bank money (CeBM) on three interoperable blockchains – Banque de France’s DL3S, IZNES, and Société Générale-FORGE. The firm claims in a press release that the experiment proves the viability of CeBM for delivery versus payment (DvP) fund transactions, at least on the three blockchain platforms involved.
A part of the recently concluded Eurosystem DLT settlement trials, the experiment was carried out in two tiers. The DvP process was facilitated with a hashed timelock contract (HTLC) that was issued on the DL3S blockchain and exchanged with the IZNES blockchain.
Steps taken
The first tier of the experiment focused on the subscription of fund units using Banque de France’s cash token. Generali played the role of investor while AXA Investment Managers was the issuer and asset manager of the tokenised fund. BNP Paribas’ Securities Services business provided its existing services and managed its clients’ wallets in DL3S.
The second tier “demonstrated the wholesale CeBM’s capabilities in a complex, multi-layered financial operation”. Generali was once again investor. OFI Invest Asset Management was the issuer and asset manager while Société Générale Securities Services acted as paying agent. A subscription of fund units in wholesale CeBM were reinvested into other funds and bonds issued by Société Générale, concluding with a redemption of positions.
A glimpse of the future
Jean-Pierre Grimaud, CEO of OFI Invest Asset Management says, “This experiment carried out in real conditions demonstrated that it was possible to safely reduce the settlement and delivery times of transactions on financial instruments thanks to the interoperability of blockchains between them and the guarantee provided by the digital wholesale CeBM.”
