Deutsche Börse Group’s subsidiary, Clearstream, a central securities depository (CSD), has announced its participation in the European Central Bank’s (ECB) trials of the digital euro wholesale central bank digital currency (CBDC). Clearstream, which operates the D7 post-trade platform, is the sole CSD involved in the initial phase of the ECB’s “preparatory” trials. The company, which oversees the German CSD LuxCSD in Luxembourg and an international CSD, has collaborated with Google Cloud to enhance D7’s capabilities. It aims to test the use of distributed ledger technology for wholesale transactions involving tokenized securities and connect with three European central bank products: Deutsche Bundesbank’s Trigger Solution, Banca d’Italia’s TIPS Hash-link, and Banque de France’s Full DLT Interoperability.
Clearstream’s head of issuer services and new digital markets, Jens Hachmeister, stated that the company plans to conduct euro-denominated issuances and delivery-versus-payment (DvP) transactions across various use cases and payment models. The tests, scheduled from May to November this year, will utilize real central bank money. The ECB initiated the preparatory phase of its digital euro research in October, following a two-year investigative phase, and issued a vendor call in January.
Banca d’Italia and Deutsche Bundesbank have also been exploring similar distributed ledger technology (DLT) in 2021. Furthermore, Banca d’Italia signed a memorandum of understanding with the Bank of Korea at the end of 2023 to explore settlement systems and CBDC.
Clearstream, with over 18 trillion euros in assets under custody, participated in SWIFT experiments involving CBDC and tokenized assets in 2022. However, a decision on launching a digital euro will only be made after the completion of ECB trials and the adoption of corresponding legislation.
The use of tokenized securities is rapidly expanding, with the market for tokenized U.S. Treasury bonds in the United States growing from $114 million to $845 million in 2021.
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