Germany’s DekaBank has successfully issued a digital bearer bond without a CSD or any other intermediaries, report Ledger Insights. The crypto security was bought by another German bank, Bankhaus Metzler, using central bank money. The transaction was a part of the European Central Bank’s (ECB) wholesale DLT settlement trials.
Germany’s electronic securities act, eWpG allows for the issuance of crypto securities without the use of intermediaries, with the caveat that the issuer holds a crypto registrar regulated by BaFin, Germany’s financial regulatory authority. DekaBank was the first bank to receive this licence.
The digital bond was issued on SWIAT, the institutional blockchain network founded by DekaBank. The delivery-versus-payment (DvP) transaction was made possible by integrating SWIAT with Bundesbank’s trigger solution, which is being used as a surrogate for a wholesale central bank digital currency (wCBDC) in the DLT trials. Settlement was on the Target 2 (T2) payment system in central bank money.
Silvio Lenk, head of treasury at DekaBank, tells Ledger Insights that “blockchain-based securities transactions can be carried out faster and more transparently than the classic settlement infrastructure. Payment transactions with CBDC are essential for this and close the previous gap.”